Q
INSIDE
Turquoise Ridge sinks shaft • 10 Premier Magnesia • 24 Elko Mining Expo • 32
UARTERLY SUMMER 2018
Family Mining Games UNR takes two generations to UK mining competition
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FEATURED CONTENTS COVER STORY
FROM THE EDITOR
Culture, craft collide
Family mining games Mining Games a family event ...........Page 5
TOP STORIES
Sinking into Turquoise
Third shaft to increase efficiency ... Page 10
Mining magnesium carbonate Premier Magnesia mine only one in U.S. ...............................................Page 24
Mining expo goes big in 2018
33rd annual event for industry, community ....................................... Page 32
Nevada’s 3 ‘critical’ minerals
Varied NV opinions submitted on DOI draft list ....................................Page 36
Healthier heavy equipment
High-tech monitoring at Newmont mines ..........................Page 50
ON THE COVER Mackay Mucker Alumni team member Vern Baker wields a jackleg drill during the 40th International Mining Games in Cornwall, United Kingdom, in March. Photo by Suzanne Featherston. More contents .................................. Page 4
W
ater sloshed into the air, onto the ground and all over the judges as members of the University of Arizona alumni team dunked and shook gold pans in a trough during the International Intercollegiate Mining Games in Cornwall, United SUZANNE Kingdom, FEATHERSTON this spring. The U of A alumni team, made up of five graduates from the school of mining and geological engineering over the past 14 years, united for the competition at the King Edwards Mine in Camborne. The event was hosted by the University of Exeter’s Camborne School of Mines, March 29-April 1. Each U of A graduate now works in the mining industry in careers including underground contracting, consulting, engineering and construction mainly in Arizona, Idaho and Nevada. The team name is “Desert Drunks,” a hangover from their college days, and each
has a snarky nickname emblazoned on their team shirt. Participants were Dave Vatterrodt, “Miner Dave,” 2004; Scott Birkbeck, “Dr. Evil,” 2008; John Featherston, “Old Man River,” 2008; Robert Tracy, “Tubesteak Tracy,” 2010; and William Werner, “Animal,” 2011. Because the U of A alumni team was short one teammate, I — “Lady River” — filled in as an alternate, based mostly on my being the willing wife of an alumnus and having a fair ability to wield a Swede saw and other hand tools. Although other U of A alumni sometimes constitute the crew, a core group gets together for the mining competitions as often as their schedules allow, wherever in the world the events might be, including destinations of three years past in Kentucky, Montana and Australia. They say the event gives them an excuse to get together in new and exciting places once a year while staying on top of what is happening in the mining industry. Plus, the grins on their faces while they play in the dirt show that what they
affectionately call “mine comp” is just plain fun. “Being part of a team and rising to compete alongside our peers gave me a visual of how we’re part of something much larger than ourselves,” Werner said. “The mining competition makes our community more tangible.” This year’s event in a historic mining district of England helped amalgamate the team for competing, camaraderie and miningrelated sightseeing. The whole experience led to lessons on cultures, history, friendships and networking. For the gold panning event, my team members cheered for each other in a taunting way, with good-natured insults and as many insinuations as one can make about “shaking it” and catching flattened lead ball bearings in the gold pan’s cracks. As with most of the competition’s seven events based on old-fashioned mining techniques, contestants raced against the clock. The idea behind gold panning is to find all five bits of metal from among a See Editor, 20
4 • MINING QUARTERLY • SUMMER 2018
CONTENTS
BUSINESS
Shell opens ‘tank farm’ ................................................................. Page 34 SWCA helps mines balance resources .........................................Page 64 Pray & Company provides solutions for mining industry .......... Page 68
COMMUNITY
Global mining events calendar ...................................................... Page 17 Newmont Giving ............................................................................ Page 42
ENVIRONMENTAL
Mine rescue contest hones skills Page 40
Feds release sage grouse plan .....................................................Page 44 Anaconda pulled from Superfund list ......................................... Page 47 Mineral Ridge seeks changes ........................................................Page 55
HISTORY
Haul trucks: Then and now ........................................................... Page 94
INDUSTRY
Statewide production makes NV No. 1 .........................................Page 18 NV a top mining jurisdiction ..........................................................Page 29 Industry Ingots ................................................................................Page 58 Mining companies report Q1 results .............................................Page 78 Navy seeks to triple Fallon range .................................................Page 85 MSHA workplace inspections ...........................................Page 89
NEWS
Hecla to purchase Klondex ........................................................... Page 30 Kinross production, expansion milestones ................................. Page 48 New gold mine wins approval .......................................................Page 56
PEOPLE
Q&A with Leslie Maple ...................................................................Page 52 People of Mines ............................................................................. Page 54
Barrick invests in Midas Gold Page 72 Accuracy through automation Page 77
COLUMNISTS
Editor: Culture, craft collide .............................................................Page 3 Taylor: Eying critical minerals .......................................................Page 82 NvMA: Threat of land withdrawal .................................................Page 85 Mullins: The mountains’ eternal value .........................................Page 87 Dobra: Steel tariffs a diversion .................................................... Page 88 Boyce: Continuous safety improvements..................................... Page 89
ONLINE EXTRAS See more on miningquarterly.com and follow Mining Quarterly on Facebook.
MINING QUARTERLY Kevin Kampman: Publisher Suzanne Featherston: Editor, 775-748-2715 Advertising: 775-738-3118. Subscriptions: 775-748-2728. Mining Quarterly is published in March, June, September and December by the Elko Daily Free Press (USPS No. 173-4320) at 3720 Idaho St., Elko, Nevada 89801, by Lee Publications Inc., a subsidiary of Lee Enterprises. Periodical postage paid at the Elko Post Office.
MQ photo contest winners Page 92
COVER STORY
ELKO DAILY FREE PRESS, Elko, Nevada • 5
The Mackay Muckers Alumni team from the University of Nevada, Reno, earned second place in the mucking event during the International Mining Games in Cornwall, United Kingdom, in March.
Family mining games Two generations compete in England STORY AND PHOTOS BY SUZANNE FEATHERSTON Mining Quarterly editor
University of Nevada, Reno, mining student Emma Baker grasped a jackleg while a teammate steadied the drill. The pneumatic tool rattled and sputtered while she powered a metal point into a block of formed concrete, boring as much distance as she could in two minutes during a mining competition in Cornwall, United Kingdom, this spring. Nearby, her father Vern Baker cheered her on and soon tested his own skill at the same event.
SUBMITTED
The Mackay Muckers, a student team from the University of Nevada, Reno, won first place in hand-steeling during the 40th International Intercollegiate Mining Competition in Cornwall, United Kingdom, in March.
He, too, was a UNR mining stu- International Intercollegiate dent who first competed in the Mining Games decades ago,
and now works as a mine manager in Argentina. At the 40th annual event — hosted by the University of Exeter’s Camborne School of Mines March 29-April 1 at the King Edwards Mine in Camborne, Cornwall — he joined four other Mackay School of Mines graduates to form an alumni team. Three of the five alumni team members had children competing on the UNR student team this year. “It’s pretty special to be watching your kid do what 40 years ago you did,” said alumnus Craig Lemons, who remembers performing the same oldschool mining techniques at a See Games, 6
6 • MINING QUARTERLY • SUMMER 2018
7 traditional mining methods
Members of the University of Nevada, Reno, student team watch the UNR alumni team at the 40th International Mining Games in Cornwall, United Kingdom, in March. Three of the Mackay Mucker Alumni team members had children participating as students in this year’s event.
Games From 5
competition in 1983. Son Austin Lemons said his dad’s past participation inspired him to try out for the student team this year.
From around the world Nearly 40 teams from around the world participated in this year’s festivities. Students and alumni represented Australia, Brazil, the Netherlands, the United Kingdom and the United States. In addition to the teams from UNR, U.S. teams hailed from the University of Arizona, Colorado School of Mines, University of Kentucky, University of Missouri, Montana Tech, South Dakota School of Mines & Technology and Virginia Tech. The mining games began in 1978 and were dedicated to the 91 miners who died in a fire at the Sunshine Mine in Idaho six years earlier. Over the years, events have been held all over the world. Last year, the University of Kentucky hosted the competition in Georgetown. Next year, UNR students and alumni are
Austin Lemons, a Mackay Mucker from the University of Nevada, Reno, prepares to compete in the gold-panning competition during the 40th International Intercollegiate Mining Games in Cornwall, United Kingdom.
1: Drilling Two compete using a pneumatic jackleg to drill as many straight holes as possible into a set space on the vertical face of a concrete block in two minutes per team member. 2: Gold panning Each team member finds five flattened lead or copper ball bearings or pellets in a pan filled with dirt as quickly as possible. 3: Hand steeling Each participant drives a 7/8-inch steel of varying lengths into a concrete block with a hammer as far as possible in two minutes. 4: Mucking The team fills a 2-ton cart with dirt, or “muck,” then runs it down a 25-meter track and back as quickly as possible. 5: Surveying With a known starting point and a time limit, a team of two reports with as much accuracy as possible the coordinates of a finishing points using old-fashioned surveying equipment. 6: Swede sawing Each participant saws through a 4-by-4-inch block of timber using a bow saw as quickly as possible. 7: Track stand The team constructs and takes down a 5-meter section of track, including sleepers, rails and fishplates as quickly and accurately as possible.
planning to host the event in hammering a steel spike into Virginia City, and they are raising concrete with a single-jack; gold funds and seeking sponsors. panning; surveying; and track stand, building a portion of a To test their skills railroad track. Performing seven traditional Although the competition is mining techniques, teams work dirty, rowdy and hard work, the together to compete against the reward is bragging rights for the clock and their peers. Events winners who take home medals To earn accolades include drilling; mucking, shov- and trophies for first through The UNR student team — eling dirt into an ore cart; Swede third places. Beer chugging is an the Mackay Muckers, with sawing, cutting a 4-by-4- unofficial event that also comes See Games, 8 inch timber; hand-steeling, with a trophy.
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8 • MINING QUARTERLY • SUMMER 2018
Games From 6
Austin Lemons, Emma Baker, Kameron Devine, James Ellis, Dalton Koslosky and Claire Roberts — earned honors in the co-ed category. They won first place in hand-steeling, second place overall, and second in gold panning, Swede sawing and mucking in the co-ed category. The Mackay Muckers Alumni team — made up of Vern Baker, James Eason, Craig Lemons, Bob Ragar and Ken Roberts — took home the gold in hand-steeling, and earned second-place honors in Swede saw and mucking. The team tied for fifth place overall in the alumni category. “It’s been the coolest thing seeing them compete,” said Claire Roberts, daughter of Ken Roberts. “They still got it.”
And build relationships
Emma Baker powers a jackleg drill into a concrete block with support from a fellow University of Nevada, Reno, mining school student during the 40th International Mining Games in Cornwall, United Kingdom, in March.
Better than medals and titles, however, is the camaraderie formed among teammates and teams while practicing and competing. Throughout the game days, cheers and jeers filled the air around the competition field at the foot of the area’s former tin mine workings. H igh-fives and hugs abounded as wet and dusty classmates and friends congratulated and comforted one another under the alternatingly clear and rainy skies of the Cornish coast. For the members of the UNR teams, the experience created even stronger bonds among family. “It’s really been a total family thing,” said Craig Lemons. “It has been a really great experience.”
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10 • MINING QUARTERLY • SUMMER 2018
TOP STORY
Sinking into
Turquoise Third shaft to increase efficiency STORY AND PHOTOS BY SUZANNE FEATHERSTON Mining Quarterly editor
GOLCONDA — Barrick Gold Corp. embarked on a more than $300 million shaft construction project at the Turquoise Ridge Mine to increase efficiency and production. “This shaft is part of the foundation for TR’s future success,” said Joe Dase, Barrick Turquoise Ridge superintendent of projects management. Development of Shaft No. 3 is the only known shaft project underway in the U.S., project leaders said, and it marks Barrick’s biggest capital investment in development in Nevada. “It’s the largest capital spend on the books right now in terms of development projects,” Dase said. “Times have been tight for every mining outfit, so capital has been tight. It’s the right time to spend the money and move it toward completion.” The project also coincides with the operator’s recent declaration of its 75 percent-owned Turquoise Ridge underground gold mine outside of Golconda as core producer. Newmont Mining Corp. owns the remaining quarter, and the companies recently renewed a contract to processes Turquoise Ridge ore
Barrick Gold Corp.’s Tyler Schoening consults an iPad during his work underground at the Turquoise Ridge Mine.
ELKO DAILY FREE PRESS, Elko, Nevada • 11
Layne is drilling two dewatering wells at the Turquoise Ridge Mine in preparation for sinking a third shaft.
at the Twin Creeks facility for another seven years. “It’s part of the piece of the puzzle that’s driving Barrick to recognize the site as a core mine because without it,” Dase said, “you wouldn’t have the future production increases.”
Need and progress From an overlook with a view of the shaft site, Dase described the need for additional mine access and pointed out progress. The company broke ground in August 2017 and contracted Thyssen Mining to sink the shaft. “Our mining horizon has marched this way over the years,” Dase said, gesturing away from two existing shafts. The third shaft will reach a depth of about 3,400 feet to where underground operations See Turquoise, 12
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12 • MINING QUARTERLY • SUMMER 2018
Turquoise From 11
are advancing, cutting haul road distance and opening up potential. “It puts us below almost all of our known and existing resources, so it puts us in a good position vertically to convey materials,” Dase said. Earlier that day, Turquoise Ridge Operations Superintendent John McCurry put the value of the shaft in perspective from underground. “Our mining front is getting so far away from these shafts,” he said. “We just keep finding more gold.” Once Shaft No. 3 is completed in about 2022, trucks transporting ore will trade a 45-minute roundtrip drive for a five-to-10- Rory Howell, Barrick Gold Corp.’s chief engineer for the Turquoise Ridge expansion project, points out the site of minute trip, said Rory Howell, Shaft No. 3 on a schematic in March. The third shaft is expected to be completed in 2022.
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chief engineer of the Turquoise Ridge expansion project. Today, only 20-ton haul trucks can fit in the southern zone, so Barrick plans to open up the drifts to allow 30-ton trucks, McCurry said. Another benefit of the third shaft is that it allows for increased ventilation volume by about 35 percent. Increased ventilation means reduced heat exposure and reduced exposure to diesel particulate matter. Shaft No. 1, at the opposite end of the mine, will be used for ventilation only. At 1,830 feet deep, Shaft No. 2 will become a secondary escape. As of early March, Layne
— a water management, construction and drilling company — had just begun drilling two dewatering wells on the prepared grounds of an old copper pit operation on mine property. Removing water from sediment will continue through May and help ensure that shaft-sinking goes smoothly, as drills for the shaft can move through dry ground. Sinking the shaft is expected to begin in about a year, with Canada-based Thyssen the winning bidder for the project after a rigorous review process. Thyssen’s other projects include the See Turquoise, 14
Shaft No. 1 at Turquoise Ridge will provide ventilation only after the completion of the third shaft in about 2022.
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14 • MINING QUARTERLY • SUMMER 2018
Turquoise From 13
original Turquoise Ridge shaft and work for Newmont, said Ryan J. McHale, Thyssen chief operating officer. “The big thing for us is partnership on this project,” Dase said, giving a nod to additional companies involved, including Newmont, Ames Construction and NewFields. The new shaft requires building another substation; forming a new ore stockpile area; constructing separate roads for light and heavy equipment; and installing additional underground utilities. Three brand-new hoists
are being designed by Hepburn Engineering Inc. “Joe and I are excited,” Howell said. “We’ve never seen a brandnew hoist. All we’ve seen are used ones somewhere else.” Thyssen expects to have a team of about 20 people, and Barrick plans to add a few more employees after shaft completion, as production increases over time.
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John McCurry, Barrick Gold Corp.’s operations superintendent for the Turquoise Ridge Mine, checks progress in a drift in March.
ELKO DAILY FREE PRESS, Elko, Nevada • 15
General Manager Henri Gonin. Barrick’s share of production in 2017 totaled more than 210,000 ounces of gold with about 2,300 tons of ore extracted per day using an underhand cut-and-fill method. Turquoise Ridge has 5.9 million ounces of proven and probable gold, and the average grade is 0.55 ounces per ton, according to a Barrick statement designating Turquoise Ridge a core mine. With the completion of Shaft No. 3 and processing ability at Twin Creeks, production is slated at 850,000 ore tons in 2018 and 2019, going up to 1.2 million tons a year between 2020-2024, according to Barrick’s 2017 year-end results. Gonin said that Barrick is not yet at the limit of the ore body, which is still open in several directions, and that any additional tons would serve to further validate the decision to build the shaft. “The mine has done a very good job of increasing their productivity to help justify the shaft,” Howell said. “So it’s a combination of the shaft making sense to start with, and then improvements on the other end increase the value of it even more.”
A bolter is silhouetted against a header underground at the Turquoise Ridge Mine in March.
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COMMUNITY
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Mining Investment North America June 14-16 Toronto, Canada The strategic mining conference and exhibition is for the leaders of the mining, quarrying and construction materials industries, and brings together 400 attendees from 35 countries. Visit www.mininginvestmentnorthamerica.com. Energy Mines and Money June 20-21 Brisbane, Australia The event for capital raising and mining investment is recognized for uniting investors with resource companies to network, hear market analysis, compare investment options and share knowledge. Visit https://queensland. minesandmoney.com UC of SME, North American Tunneling Conference June 24-27 Washington, D.C. The conference is a premier event for tunneling and underground construction. Visit http://natconference. com/index.cfm/register.
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Mining Claim Workshop June 28 Nugget Casino Resort, 1100 Nugget Ave., Sparks The Bureau of Land Management workshop covers
locating, mapping and filing claims, land status, transfers of interest, waivers and annual maintenance fees, bonding and surface disturbance. RSVP to Tina Chafin, 775861-6636, cchafin@blm.gov. 34th Annual Northern Nevada Earth Science Education Workshop July 17-18 Wooster High School, Reno The Nevada Mining Association offers teachers education about rocks, minerals and mining, including a mine tour. New Directions in Mineral Processing Fundamentals July 17-20 Colorado School of Mines, Golden, Colorado The course describes how newer technologies are influencing mineral processing. Visit www.csmspace.com/ events/minproc. 40th Annual Nevada Mining Association Convention Sept. 5-8 Harrah’s Lake Tahoe, Stateline The NvMA event features reports from industry experts, and state safety and reclamation awards presentations. Visit www.nevadamining.org. MEI2018 Mining & Exploration International Conference & Expo Sept. 6-8 Las Vegas Convention Center, Las Vegas The lineup of educational programming includes lectures, workshops and poster sessions concentrated on the future of exploration and mining. Visit https://events.american-tradeshow.com/mei/ begin.
18 • MINING QUARTERLY • SUMMER 2018
NV top U.S. gold producer 5.64M oz statewide in 2017 SUZANNE FEATHERSTON Mining Quarterly editor
CARSON CITY — Gold production in Nevada increased more than 3 percent in 2017 compared to last year while gold prices were up slightly, according to reports released in May by the Nevada Division of Minerals. Nevada’s mines produced 5.64 million ounces of gold in 2017. This total was up 3.2 percent from the 2016 production level of 5.47 million ounces. The average annual price of gold increased slightly from $1,251 per ounce in 2016 to $1,257 per ounce in 2017. Nevada continues to be the nation’s top gold-producing state, contributing 72 percent of the total U.S. gold production in 2017 of 7.88 million ounces, as reported by the U.S. Geological Survey. Gold is Nevada’s No. 1 export, with a 2017 value of about $6.29 billion, the division reported at the SME Northern Nevada Section on May 14, citing statistics from the U.S. Census Bureau. Utah is the nation’s only other major gold exporter, with nearly half of Nevada’s production value. Other states with major precious stone or mineral exports are Alaska, with the biggest export being zinc; and New York, with the biggest export being diamonds. Nevada produced 5.6 percent of total world gold production in 2017, ranking fifth behind China, Australia, Russia and Canada. Seventeen operators ran 27 gold mines in the state in 2017.
Nevada Division of Minerals Administrator Rich Perry shared this graph showing statewide gold production results at an SME meeting in May.
The two most prolific gold producers in 2017 were Barrick Gold Corp. and Newmont Mining Corp., followed by Kinross Gold Corp. and SSR Mining Inc., according to an annual status and production report draft presented to the Commission on Mineral Resources on May 17. Silver production in 2017 decreased 5.2 percent to 8.48 million ounces from the 2016 production level of 8.95 million ounces. The average annual price of silver decreased slightly from $17.14 in 2016 to $17.04 per ounce in 2017. Fifteen operators mined 24 silver sites in the state in 2017, the division states in its SME presentation. Nevada has only
one primary silver mine, Coeur Mining Inc.’s Rochester mine near Lovelock. Nevada’s copper production in 2017 was 146 million pounds, down 9 percent from 2016. The average price of copper in 2017 was $2.79 per pound. KGHM International was the state’s only primary copper mine in 2017, producing 113 million pounds last year. Newmont Mining Corp.’s Phoenix mine also produced copper as a secondary mineral, with production of 33 million pounds. KGHM International also reported molybdenite production at 652,763 pounds in 2017. Industrial mineral production in Nevada in 2017 included
aggregates, barite, diatomite, dolomite, gypsum, lime and limestone, lithium compounds, magnesium compounds, molybdenite, opals, perlite, salt, silica sand and specialty clays. The number of active mining claims in Nevada increased 9 percent from January 2017 to February 2018, to 194,348, according to the division’s SME presentation. In addition to assisting in the responsible exploration for minerals, the Nevada Division of Minerals is responsible for permitting, inspecting, and monitoring all oil, gas, geothermal and dissolved mineral exploration drilling activities on both public and private lands.
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Editor From 3
measure of muck as quickly as possible using water, and judges watch carefully to ensure none is lost. Losing one results in a time penalty. Our group escaped without a penalty but not without a serious scolding. One of the lady volunteer judges — a proper Englishwoman who might faint if she heard a conversation in an Elko establishment — took offense to the content of their jeers, saying the American alumni were “irreverent to each other” and “irreverent to authority.” Turning to the youngest of the crew, she poked a finger into his chest and said, “YOU are the worst.” She made him apologize to each of the women present for his behavior. To his credit, the young man
William Werner, center, splashes water out of a gold pan in search of five smashed lead ball bearings as Robert Tracy, left, and judges watch. The University of Arizona alumni team competed in the 40th International Intercollegiate Mining Games in Cornwall, United Kingdom, in March.
removed his hard hat, went to each of the three judges, took their hands, and offered a rather charming apology to all. His enthusiasm was not
dampened — which is more than anyone nearby could say of their clothes. Another judge chalked up the circumstances to cultural
differences. Observing the almost 40 teams — including seven other alumni teams — affirmed the second judge’s perspective. To my senses,
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University of Arizona alumni build a section of railroad track during the 40th International Intercollegiate Mining Games in Cornwall, United Kingdom, in March. Dave Vatterrodt and John Featherston, foreground, drive spikes, while Scott Birkbeck and William Werner set fish plates, below, and Robert Tracy coaches.
nearly all seemed equally loud and boisterous in their own ways. Some poor students even ended up being tossed into the gold panning trough by their peers. Groups also displayed a wide range of ages, from the seasoned alumni team from the University of Nevada, Reno, to the hopeful someday graduates from the same school. Three of the five UNR Mackay Muckers Alumni participants had a child on the student Mackay Muckers team. (Read more about the UNR teams in “Family mining games” on Page 5.) The bonds of family and friendship were evident among the U of A crew, as well. I showed my support by volunteering for the hand steeling competition — my least favorite event to watch, much less participate in. Over the past two competitions, I’ve seen more than one student smash their hands with hammers and leave with broken bones. The guys decided I should go second in the lineup as we each attempted to pound and twist a steel spike into a concrete block as far as possible in two minutes. Two minutes turns out to be a long time to whale a
heavy hammer, and my already modest swings became pitifully short as time chipped away with a slow but rhythmic tink, tink, tink. Let’s just say I didn’t help the team win that one, although they politely told me I did a good job and reserved further irreverent remarks for their former classmates. The UNR alumni took first place in the hand steel event, achieving a total depth that was nearly twice ours. (Sorry, guys!) Track stand proved to be the event that allowed the Desert Drunks to shine. Hardly needing a word of planning, the five team members took on their roles to assemble and disassemble a 5-meter section of railroad track. The crew moved through installing sleepers, rails and fishplates as though their dance was choreographed, and as though they had been doing it together for years — and indeed, they have. Their second-place performance in track stand and positive outcomes for jackleg drilling and gold panning made up for our hand-steeling attempt, and in the end we tied with UNR for fifth place among See Editor, 22
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Editor
team captain and founder of Jackleg Consulting LLC. “What company is buying From 21 another, what mine is starting development or production, alumni overall. and sometimes, more imporAlthough the medals we brought home for three events tantly, what company is hiring. … Events like the now hang with pride in our mining competition are where offices or home bars, accothose industry contacts lades are not the point of the U of A alumni attending min- are made.” ing competitions. “Staying in touch on a per- Contact Suzanne Featherston, sonal level helps keep us all up Mining Quarterly editor, with to speed on how the industry story ideas or suggestions at sfeatherston@elkodaily.com is doing,” said Vatterrodt,
or 775-748-2715.
Mining Quarterly editor Suzanne Featherston, center, practices gold panning as an alternate member on the University of Arizona’s alumni team at the 40th International Intercollegiate Mining Games in Cornwall, United Kingdom, in March.
Dave Vatterrodt, a University of Arizona alumni team member, drills into a concrete block with a jackleg.
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24 • MINING QUARTERLY • SUMMER 2018
TOP STORY
PREMIER MAGNESIA
Premier Magnesia is the only magnesium carbonate mine in the U.S.
Mining magnesium carbonate Premier Magnesia mine only one in U.S.
operates the only magnesium carbonate mine in the United States, and the Nevada mine 83 miles southeast of Fallon has ADELLA HARDING Mining Quarterly correspondent another distinction, as well. “It is my understanding that P re m i e r M a g n e s i a I n c. the Premier Magnesia operation
in Gabbs is the longest continuously operating mine in Nevada,” said Richard Perry, administrator of the Nevada Division of Minerals. The operations in Nye County got their start in World War II,
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when the U.S. Department of Defense needed magnesium for metals. Plant construction started in 1941. “There was a huge effort to get it in operation for the magnesium metal for the war effort.
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They essentially built it in a year or two, which was phenomenal back then,” said Lynden Johnson, who has been working at the magnesium mine more than 40 years. He said the final war-time plan was for mining 112 million pounds per year. The birth of the magnesium mine also meant a huge need for electricity not available on-site, so ore was trucked to Henderson, where the magnesium metal was manufactured using electricity from Hoover Dam, Johnson said. Although the big push was for the war effort, the Nevada Bureau of Mines and Geology’s 2016 Mineral Industry Report states that magnesium mining at Gabbs started in 1935. The deposit was discovered in 1927, according to Premier Magnesia. After WWII ended, the government got out of the
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A Premier Magnesia LLC crew mines magnesium at its operations near the town of Gabbs in Nye County.
See Magnesium, 26
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PREMIER MAGNESIA
Deposits were discovered near Gabbs in 1927, leading to the founding of Premier Magnesia.
Magnesium From 25
magnesium-mining business. Yet the Department of Interior’s inclusion of the compound on the draft list of critical minerals – nonfuel minerals considered crucial to U.S. economic and national security – could bring added emphasis to magnesium. Magnesium compounds are the eighth-most abundant element that make up about 2
percent of Earth’s crust, according to the U.S. Geological Survey. Johnson, now a contractor with Premier Magnesia after so many years at the mine, including as the mine’s general manager before retirement, said that when he started at the mine in 1972, the operations were owned by Basic Inc. Johnson left the mine in 1975 and came back in 1978. He has been there since then, working in mill operations, bookkeeping, inventory control, assistant mill superintendent, mine
superintendent and general The second-largest seller is manager for four and a half years. a slurry product used as an acid Brian Simpson is the general neutralizer, such as in sewage affluent. This slurry also could manager now. be used in pit lakes, he said. Applications Premier Magnesia also ships These days, Premier Magne- product to its sister company, sia sells its magnesium-based Giles Chemical in South Carocompounds from the mine in a lina, to make magnesium sulvariety of ways and for a variety fate, known as Epsom salt, that is of uses. sold across the country. Premier “The biggest user is animal Magnesia’s headquarters are in feed supplement. Our product is Waynesville, S.C. one ingredient” for the feed mix The company website states used by feedlots and dairies,” See Magnesium, 28 Johnson said.
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Magnesium From 26
that Giles Chemical is the largest producer of magnesium sulfate in North America. “The uses have changed over the years,” Johnson said, noting that before the steel industry tumbled in this country, the mine produced deadburn magnecite for lining furnaces and high-temperature mortars for the insides of furnaces. That portion of the plant stopped when the need vanished. Now, the company is looking Plant construction at Premier Magnesia began in 1941 near Gabbs. at new uses, as well as selling current products, including one that can be mixed into concrete to prevent cracks, Johnson said. Another product is used to identify spills off trucks. The product shows first whether the spill is an acid or an alternative and turns colors. “That stuff is cool,” said Johnson, who added the company also sells a product for environmental cleanup when there are heavy metals present, to neutralize them. “It’s project-specific PREMIER MAGNESIA and called EnviroBlend.”
Operations
The mines on the Nevada site are open pit, but ore is mined differently than a gold operation. There aren’t deep pits, but rather Premier Magnesia uses a selective mining process where cuttings from drill holes are analyzed for chemical content, and the drill sites can be color-coded for extraction using a map. “It’s all invisible. The whole ore body up there is magnesium,” Johnson said, so the analysis looks for insoluble content, such as iron silica, and the lime content. “We want a low percentage of insolubles and of lime and a large percent of magnesium.” Mining is on a need basis, depending upon orders, and in
Premier Magneisa produced metal magnesium for a plant in Henderson as a major supplier during World War II.
late April the ore was coming from the waste stockpiles. The mine operates on a four-day work week. Premier Magnesia has 125 employees at the Gabbs location, which includes a mill. Johnson said there are eight workers for the quarry, and they use five 60-ton haul trucks and front-end loaders. These eight people do the drilling, mining and crushing and haul ore to the mill. Ore goes through primary and secondary crushers before going to the mill. The ore goes into furnaces. There are three multiple-hearth furnaces to allow for temperature control. Each furnace has 14 hearths. “By getting precise burn, we
are making a consistent and better product,” Johnson said. Ore coming out of the furnaces is segregated by size and may go through a ball mill or a grinder to become the product Premier Magnesia sells from the site.
Production
Production capacity is more than 150,000 tons a year at the Gabbs site. “We sell in 50-pound bags and 2,000 and 3,000-pound bags and ship out in bulk trucks 80 miles to Fallon and load them on rail cars,” Johnson said. “There, they are shipped all over the nation. We also have customers that don’t want to pay for bagging.” Those come to the
PREMIER MAGNESIA
plant to load up. Johnson’s work at the mine is now in research and development. The project is gleaning usable magnesium ore from waste stockpiles with technology that allows rock-by-rock analysis to get to the good ore. “We’re doing responsible mining, not just high-grading,” he said. There aren’t any major reclamation projects on-site because the operation is ongoing, but along with re-examining the waste piles for ore, the magnesium waste is used on roads and sold or given away to employees and communities, Johnson said. He estimated mine life at another 70 years, but there are 120 years of reserves and resources. Premier Magnesia’s Nevada site includes roughly 650 acres under the plan of operations. Ninety-five percent is private land and 5 percent is claims leased from the U.S. Forest Service The company holds 2,000 acres. Most of the mine’s employees live in Fallon, but others live in Hawthorne, 60 miles away, or Fernley, 100 miles away, or in Gabbs on State Highway 361, Johnson said. “We’re in the middle of nowhere here,” he said.
ELKO DAILY FREE PRESS, Elko, Nevada • 29
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Fraser Institute evaluated 91 jurisdictions using an “Investment Attractiveness Index,” which considers perception of minerals and policy. Regions are ranked on geologic attractiveness and the effect of government policy on attitudes toward exploration investment. The report was released Feb. 22. When considering just perception of government policies, Ireland takes the lead as the region with the most attractive policies toward mining. Finland, Saskatchewan, Sweden, Nevada, Northern Ireland, Michigan, Wyoming, Quebec, Newfoundland and Labrador also made the top 10. Guatemala ranked worst for combined policy and mineral potential. Also in the bottom 10 were Kenya; Mendoza, Argentina; Chubut, Argentina; Mozambique; Bolivia; Venezuela; Romania; China; and Nicaragua. Overall, investment attractiveness decreased worldwide, according to the report. Canada ranked as the most attractive region overall, followed by Australia and the United States.
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30 • MINING QUARTERLY • SUMMER 2018
NEWS
Hecla to purchase Klondex Mining giant to acquire Nevada land package
ELKO DAILY Hecla Mining Co. and Klondex Mines Ltd. announced March 19 that Hecla will acquire all the outstanding shares of Klondex, a high-grade Nevada underground gold producer with its Fire Creek, Midas and Hollister mines, through a plan of arrangement. Klondex’s Canadian assets will be spun out to its existing shareholders. “Opportunities to acquire significant land packages along Nevada’s prolific gold trends are very rare. Rarer still are for these land packages to have the highest grade mines in the U.S. and this
transaction is consistent with Hecla’s strategy of owning large prospective land packages with mines where we can improve costs, grow reserves and expand production,” said Phillips S. Baker, Jr., Hecla’s president and CEO. Under the transaction, Hecla will acquire Klondex for consideration of $462 million with a mix of cash and shares of Hecla common stock and the newly formed company (Klondex Canada). Klondex’s shareholders will receive $2.47 per share in cash or shares of Hecla, which represents a 59 percent premium to Klondex’s 30-day volume-weighted average price, as at March 16, on the NYSE American.
“One of our core strengths i s o p e ra t i n g h i g h - g ra d e , narrow-vein underground mines, and Klondex’s three operating mines – Fire Creek, Midas and Hollister – are some of the highest-grade gold mines in the world,” Baker said. “After extensive due diligence, we see significant opportunity to improve costs, throughput and recoveries over time with our expertise. The combined approximately 110 square mile land position offers the opportunity to make discoveries and grow the reserve base as we improve our knowledge of the geology, something we have done at our other operations.” The closing of the transaction is subject to certain conditions including shareholder and
regulatory approvals. Pending receipt of all required approvals, the company anticipates that the transaction will be completed around the end of the second quarter of 2018. Klondex’s president and CEO Paul Huet said the transaction benefits shareholders and optimizes the Nevada mining assets. “Hecla has a proven track record of developing and optimizing mining assets such as ours, and has a strong balance sheet that should help Fire Creek and our other properties reach their full potential,” Huet said. “Hecla operates a diverse portfolio of some of the highest-grade mines in the world, and the addition of our assets strengthens the portfolio further.”
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32 • MINING QUARTERLY • SUMMER 2018
TOP STORY
ELKO DAILY FREE PRESS ARCHIVES
Visitors stroll among the more than 400 booths at the 2017 Elko Mining Expo.
Mining expo goes big in 2018 33rd annual event for industry, community SUZANNE FEATHERSTON Mining Quarterly editor
A piece of Komatsu equipment was set up on the Elko Convention Center’s front lawn for the 2017 Elko Mining Expo.
An expo of mining-scale proportions will take over the more than city-block-size area in and around the Elko Conference Center for the 33rd annual Elko Mining Expo on June 7-8. The event — one of the oldest U.S. exhibitions in the industry — draws about 8,000 visitors to Elko each year to interact with representatives from hundreds of companies. “The purpose of the show is to get industry professionals and the public to come together to discuss mining,” said Erin Myers, event coordinator with the Elko Convention and Visitors Authority. “It’s a trade show, but it is also a community event.” This year, the ECVA has 496
booths to lease to big-name mine operators, equipment manufacturers, support service companies and more. Returning vendors and businesses come from all over the country and world, including Australia, Canada, Germany and New Zealand. “Historically, the show has grown tremendously,” said Myers, who explained that the event started out in the convention center and has overflowed to the conference center, side streets, parking lots and park over the past few years. Already big, the Elko expo continues to grow. Last year’s event featured 23 more booths than in 2016, and advertising opportunities increase yearly, according to Elko Daily Free Press archives. Interest has expanded from mining companies and direct service providers to additional industries. “Typically speaking, the show
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Last year, Redi Services LLC from Elko participated in the expo to keep its industrial support services at the forefront of potential customers’ minds. “The mine expo is a phenomenal expo, and it’s a great chance for a company like ours to showcase our company, our service line and be able to interact with the public in the greater Elko area,” Jay Anderson, Redi Services’ chief financial officer, told the Elko Daily. “We get a chance to visit with representatives of the mines and other service companies.” The expo is open at 700 Moren Way from 9 a.m.-5 p.m. June 7 and 9 a.m.-3 p.m. June 8. For more information, call the ECVA at 775-738-4091.
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sells out every year,” Myers said, adding that vendors can sign up even on opening day. Adam Fulcher of Westgate Resorts and Spa in Park City, Utah, participated last year, offering a bargain price for a resort stay. “This is good marketing for us,” he told the Elko Daily. Open to the public, the expo allows industry players to display their often neck-craning equipment parked in the vicinity. In 2017, Komastu Equipment Co. displayed its gigantic bright yellow machines on the lawn in front of the convention center. In 2016, Sterling Crane showcased a 340-foot-tall crane at the event. “What’s different about this show is that it is open to the public. Really a lot of the vendors encourage that because our town is so driven by the mining industry,” Myers said. “It is a way to get families involved and keep them in the loop.” Eye-catching displays and colorful tchotchkes help entice and educate visiting adults and children alike about the mining industry while being conversation pieces that could initiate a business deal. The expo allows company representatives to discuss possible partnerships with potential clients.
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BUSINESS
Lee Zorn, industrial sales and technical general manager for Shell North America, slices a ribbon in celebration of a tank farm grand opening in Winnemucca on May 2. He is joined by representatives from Shell Lubricants and distributor Silver State Petroleum.
Shell opens ‘tank farm’ Hub for mining industry
STORY AND PHOTO BY SUZANNE FEATHERSTON Mining Quarterly editor
With the recent opening of a tank farm in Winnemucca, Shell Lubricants positioned itself to serve clients in northeastern Nevada’s mining industry. “This is a really important milestone for us,” said Tonya Donaldson, global marketing manager for Shell. The company, with distributor Silver State Petroleum, celebrated the expansion of the Winnemucca Distribution Center, 340 E. National Ave., with a ribbon cutting May 2. “This is where it’s all going to begin for us,” said Lee Zorn, industrial sales and technical
general manager for Shell North America. Designed as a bulk storage hub for lubricants, the site has 155,000 gallons of total storage capacity in 10 tanks. The two 10,000 gallon tanks, five 15,000 gallon tanks and three 20,000 gallon tanks contain products including engine oil, gear oil, antifreeze, specialized hydraulic oils and torque fluids. Tanks are equipped with filters in two places to prevent contamination by dust and moisture. “Product integrity is of utmost importance,” said Tom Van De Pol, Silver State Petroleum co-owner with Ron Van De Pol, David Atwater and Curtis Thornhill. Silver State Petroleum has an office in Sparks and a sister company with six locations in California and Arizona, serving
clients in the mining and agricultural industries. The distributor employs about 425 people. “This is a little piece of the big puzzle,” said plant manager Michelle Martinez. The approximately 3-acre Winnemucca property with railroad spur access features a 7,500-square-foot warehouse that has been in operation since 2015. The distribution center offers packaging of grease from drums into totes that contain up to 385 gallons and delivers totes from a flatbed truck to several area mines, including KGHM’s Robinson Mine. “We went out to bid for the first time on our lubricant supplier for our mobile and fixed equipment at Robinson,” said Amanda Hilton, asset manager, maintenance at KGHM’s
Robinson Mine, in a testimonial video, “and one of the things that really impressed us was the service component that came with the Shell products.” Shell sent experts to the mine site to integrate with the maintenance team, work on equipment, and perform inspections and audits. The “lube experts” trained Robinson Mine staff and upgraded the lubricant system so that it is faster, cleaner and more compact. With the tank farm, Shell and Silver State Petroleum representatives hope to add to their roster of mining customers. “It’s all about this local supply,” Zorn said. “And being able to get the product to the mine quickly,” added Korey Adams, Shell sales manager for mining and the West.
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TOP STORY
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Varied NV opinions submitted on DOI draft list SUZANNE FEATHERSTON Mining Quarterly editor
Thirty-five minerals made the Department of Interior’s draft list of “critical minerals,” including three mineral commodities — barite, lithium and magnesium — actively produced in Nevada. “We’re blessed in Nevada with several of those mineral commodities that are important,” said Rich Perry, Nevada Division of Minerals administrator. The recently published draft list comes after President Donald Trump issued an Perry executive order Dec. 30 that aims to reduce the country’s vulnerability to disruption of mineral supplies by identifying critical minerals and new sources. Teams from the U.S. Geological Survey and Bureau of Land Management developed an unranked list of 35 critical minerals, and the DOI published the notice of the draft minerals list Feb. 16. (See sidebar for the complete draft list.) “It’s very timely and long overdue to look at that because we [in the U.S.] continue to be net importers,” Perry said. “We’re becoming more reliant on critical elements.” Critical minerals are defined as nonfuel minerals essential to U.S. economic and national security, with vulnerable supply chains, that serve an essential function in the manufacturing of a product, according to the executive order. “Despite the presence of significant deposits of some of these minerals across the United
States, our miners and producers are currently limited by a lack of comprehensive, machine-readable data concerning topographical, geological, and geophysical surveys; permitting delays; and the potential for protracted litigation regarding permits that are issued,” the order states. In 2017, imports made up more than half of nonfuel mineral commodities, and the U.S. was completely reliant on 21 of those, according to the USGS Mineral Commodities Summary for 2018. Last year, China and Canada were the top sources of nonfuel mineral commodities for the U.S., followed by Brazil, Russia and South Africa, the USGS reports. Nevada produces 20 metals and minerals, representing more than 11 percent of the nation’s mineral production, according to the Nevada Mining Association. The industry adds billions of dollars to the U.S. trade ledger, the association reports, while creating jobs and stimulating the economy. The NvMA stated that all of Nevada’s minerals could be considered critical and is wary of too narrow a definition and the unintended consequences of the draft list. The association submitted public comments on the draft list for the March 19 filing deadline but provided a separate statement to the Elko Daily Free Press. “Dubbing some minerals as ‘critical’ insinuates that others are not,” the NvMA said. “Rather than trying to rank one mineral ahead of another, the administration should embrace policies that boost domestic exploration and production of all minerals. The Nevada Mining Association encourages the Department of Interior to reconsider this proposed list and carefully
ELKO DAILY FREE PRESS, Elko, Nevada • 37
Draft list of critical minerals 1. Aluminum (bauxite)
13. Graphite (natural)
24. Rhenium
2. Antimony
14. Hafnium
25. Rubidium
3. Arsenic
15. Helium
26. Scandium
4. Barite
16. Indium
27. Strontium
5. Beryllium
17. Lithium
28. Tantalum
6. Bismuth
18. Magnesium
29. Tellurium
7. Cesium
19. Manganese
30. Tin
8. Chromium
20. Niobium
31. Titanium
9. Cobalt
21. Platinum group metals
32. Tungsten
10. Fluorspar 11. Gallium 12. Germanium
22. Potash 23. Rare earth elements group
contemplate the unintended consequences that may result in the years ahead.” Of the 20 metals and minerals produced in Nevada in 2016, three are on the critical minerals draft list: barite, lithium and magnesium, according to the Nevada Division of Minerals. Barite is used as an oil and gas drilling fluid and is deemed important to the energy, telecommunications and electronics sectors, according to the DOI and USGS summary of methodology and background information. China is the top producer and supplier of the world’s barite. Most of the barite production in the U.S. came from four mines in Nevada in 2016, Perry said, with three companies in the Battle Mountain area in 2016 and one in Elko. The 2018 report states that domestic mine production of barite decreased in 2017. Production tends to mirror the ebb and flow of the oil industry. The USGS reports that there are an estimated 150 million tons of identified barite resources in the U.S. Lithium — produced mostly in Australia and supplied by China — is relevant to the aerospace, defense, energy, telecommunications and electronics, and transportation industries sectors, the draft list summary states. Notable applications include use in
33. Uranium 34. Vanadium 35. Zirconium
rechargeable batteries, and the demand for energy storage solutions is growing. The only U.S. lithium production came from Nevada, the USGS reports in its 2018 mineral commodity summary. The Nevada Bureau of Mines and Geology identifies Albemarle Corp.’s Silver Peak Operations in Esmerelda County as an active lithium producer in 2017. Perry said the company’s output totals only 2 percent of world production, which is only half of Tesla’s projected need once its gigafactory is in full operation. Because of growing demand for lithium in the energy-storage sector, interest in mining lithium has increased. Nevada had about 12,000 placer claims for lithium at Perry’s last count. U.S. reserves of lithium are estimated at 35,000 tons, the USGS reports. Magnesium is used in the aerospace, defense, energy, telecommunications and electronics, and transportation industries, the summary shows, and it is produced and supplied mostly by China. The 2018 USGS mineral commodity summary for magnesium reports that about 60 percent of magnesium compounds consumed in the U.S. goes into agricultural, chemical, construction, environmental and See ‘Critical’, 38
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‘Critical’ From 37
industrial applications. In 2017, Premier Magnesia ran Nevada’s only magnesium mine near Gabbs, according to the Nevada Bureau of Mines and Geology preliminary draft map. Premier Magnesia is also the state’s longest continuously running mine since 1941. (Read more about Premier Magnesia on Page 24.) Additional listed nonfuel minerals have been produced commercially in the state throughout its history, Perry said. Antimony, arsenic, fluorspar, potash tungsten and uranium are among the resources that have been mined in Nevada, and many other industrial minerals not on the critical list originate in the state. “Some of these have been produced in Nevada in the past, and there are resources available
in the state but apparently not at a level that they are being exported,” Perry said. Resources that are available in Nevada but not being mined in the state include cobalt and tin, Perry said, suggesting that if domestic production were incentivized, and market supply and demand favorable that “we could very well see a boom for some of these things on this list that have not been explored for before.” The nation’s needs for industrial mineral will change over time, Perry said, reflecting on the recent rise in popularity of materials needed to manufacture devices such as cellphones and batteries. While discussing the critical minerals of the future, he said it is important to keep public lands open to multiple uses, including mining, so that the nation has access to its domestic resources if and when the time comes.
“We want to make sure that the land in our state that is under federal government management remains open for locating claims — essentially that it stays as multiple use to stake claims and explore,” Perry said. Creating the list is a step toward the federal government’s policy to reduce the nation’s vulnerability to supply disruptions. The executive order also directs that new sources of critical minerals be identified; activities at all levels of the supply chain be increased; advanced electronic access of data be available; and leasing and permitting be streamlined. “An increase in private-sector domestic exploration, production, recycling, and reprocessing of critical minerals, and support for efforts to identify more commonly available technological alternatives to these minerals, will reduce our dependence on
imports, preserve our leadership in technological innovation, support job creation, improve our national security and balance of trade, and enhance the technological superiority and readiness of our Armed Forces, which are among the Nation’s most significant consumers of critical minerals,” the executive order says. Despite its leaders’ concerns with the definition and draft list, the NvMA applauded the Trump administration’s efforts to streamline the mineral permitting process and increase domestic sources of minerals. The DOI received more than 450 comments regarding the draft list. “DOI is currently reviewing all comments, which will inform the development of the final list of critical minerals,” a USGS press officer said in a statement. “The final list will become part of the overall federal strategy.”
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40 • MINING QUARTERLY • SUMMER 2018
Mine rescue contest hones skills Winners
STORY AND PHOTO BY SUZANNE FEATHERSTON Mining Quarterly editor
Mine rescue team members weave through mazes of fencing marked with obstacles in the Winnemucca Events Complex on March 13 during a hypothetical underground mine rescue scenario. They’re competing in the 2018 Nevada Regional Mine Rescue Competition hosted in conjunction with the Mine and Health Safety Administration to hone skills and test the knowledge of those who might be called to respond to a mine emergency. At about midday, the muffled shouts from the captain of Barrick Nevada’s Goldstrike mine rescue team can be heard as he communicates through his respirator to four teammates in tow. “Pack it on out!” “Are you injured? Injured!” “O2. 60 percent.” “Stay to the right — to the right!” “Scale! Scale! Scale!” The captain, “gas man,” “map man,” medic and co-captain are linked together with a rope like climbers use at altitude, and they pull a cart full of supplies that they might need in an emergency. No one going in knows the details of the situation until they enter. In this scenario, designed by MSHA safety and health specialist Jim Fitch, the mine contains a fire, bad ground, water over knee-deep and an injured person. “They are based on real life,” said John Pereza, assistant manager of MSHA’s western district, which includes Nevada. The team must also check levels of four potentially dangerous gases and communicate with two more participants in a base
A Newmont Mining Corp. mine rescue team consults a map during an underground mine rescue training scenario March 13 in Winnemucca during the 2018 Nevada Regional Mine Rescue Competition.
to create a map of the fictional mine. They have 75 minutes to complete the operation, and MSHA judges keep score. “What’s good about these scenarios is putting them in a stressful situation and thinking as a team to solve it,” said Mike Peck, Nevada Mine Rescue Association chairman with Newmont Mining Corp. He explained that the goal is to “find problems when you’re exploring and mitigate.” Twelve teams from Nevada, Colorado, Idaho, South Dakota, New Mexico and Wyoming are participating in this year’s event, sponsored by the Nevada Mine Rescue Association in cooperation with the Nevada Mining Association. There are about 12 regional mine rescue competitions held in conjunction with MSHA each year in the U.S. Pereza explained that mine rescue in Nevada is different from other regions because of unique ore bodies and mining methods. The scenario used a “room and pillar” setup, but Nevada mines are not laid out the same way. “This ain’t nothing compared to our underground mines in Nevada,” Peck said. Still, the training and testing
has value as it allows the teams to “practice our skills, and if we need to use it in the real thing,” Peck said, “they’ll be ready.” Small Mine Development mine rescue superintendent Derek Dawson emphasized the importance of experience. People will almost never rise to their levels of expectation, he said, but they can rise to their level of training. SMD did not have a team participating this year but supplied volunteers to help orchestrate the event. Kinross Bald Mountain employees also provided support. The mid-March competition was a first for Kala Cassinelli, who serves as the “gas man” on a team for Klondex Mines Ltd. After her team completed the course, she bubbled with excitement. “We owned it,” she said. “It was fun. It was exciting. It made us think.” In addition to the underground rescue field tests, events included written and other field tests to gauge competency in first aid and equipment operation. Winners in each category and the overall champion were announced March 15 (see sidebar).
Trainer Richard West, WIPP Team Tech for BioMarine Barrick Turquoise Ridge Team Tech for Draeger Solvay Silver Solvay Blue First Aid Newmont Carlin WIPP Barrrick Goldstrike Barrick Cortez Field Newmont Carlin Solvay Silver Solvay Blue WIPP Nevada Best Overall Newmont Carlin Overall Winner Newmont Carlin
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42 • MINING QUARTERLY • SUMMER 2018
COMMUNITY
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44 • MINING QUARTERLY • SUMMER 2018
INDUSTRY
SUZANNE FEATHERSTON
A taxidermy exhibit presents sage-grouse.
Feds release sage grouse plan
Proposing change to loosen Obama-era rules DANIEL ROTHBERG The Nevada Independent
The Trump administration proposed changes to how Nevada manages sage grouse, a stately bird that has come to symbolize a larger dispute between environmentalists and extractive industries over how to balance conservation and development on public lands. In a 204-page report, the Bureau of Land Management proposed diluting several sage grouse protections, first approved under the Obama administration, in a move that the BLM said would “increase management flexibility, maintain
access to public resources and promote conservation outcomes.” The report released May 2 for Nevada and Northern California was one of six analyses issued for Western states as part of the Trump administration’s push to revisit the Obamaera rules. The reports were part of an ongoing review of the Obama administration’s 2015 sage grouse decision, which had been criticized for limiting grazing, mining and petroleum exploration. The draft environmental impact statement calls for more flexibility to update the framework for Nevada and more
case-by-case exceptions to sage grouse rules, granting greater authority to the state director for the BLM, the agency responsible for managing nearly 70 percent of all the land in Nevada. The changes would also remove a special habitat designation that limited some mining and geothermal development on certain lands marked as sage grouse habitat. In a statement, Sen. Dean Heller said the proposed changes could spur development. Heller described them as “an important step toward returning power back to our local communities, and lifting the Obama administration’s heavy-handed regulations that have put major restrictions on million acres of
land in Nevada and stifled economic opportunities.” The BLM wrote that its proposal “could lead to a corresponding increase in populations and employment for the counties that would see new mine development. Within the analysis area, the projected economic impacts from operation of future mines would result in 801 jobs, a labor income of $62 million and approximately $12 million in state [and] local tax revenue.” But policymakers have long worried laxer rules could lead to an endangered species listing. The 2015 sage grouse framework was a compromise between environmentalists, governors and some industry groups that took years to put together and
ELKO DAILY FREE PRESS, Elko, Nevada • 45
was itself composed of 98 smaller plans. Its goal was to prevent listing of the unique bird, known for an elaborate mating ritual that involves inflatable yellow airsacs, as an endangered species. Such a listing, which the federal government was considering at the time, would impose greater limitations on development. The U.S. Fish and Wildlife Service, which makes the listings, used the rules and the certainty they provided as a reason not to list the bird. That’s why Nada Culver, senior counsel at the Wilderness Society, said that loosening the rules could be counterproductive in the long run. “I don’t think it’s surprising that a plan across 67-million acres had complaints from each state,” Culver said in an interview. “The risk is if you make too many changes it does add up so we don’t have the strength of protections across the range that we need to justify the [decision].”
The draft environmental impact statement calls for more flexibility to update the framework for Nevada and more case-by-case exceptions to sage grouse rules, granting greater authority to the state director for the Bureau of Land Management, the agency responsible for managing nearly 70 percent of all the land in Nevada. Patrick Donnelly, the Nevada state director for the Center for Biological Diversity, said the broad language could begin to unravel specific protections that prevented the bird from being listed. “Tearing up the sage grouse plans call into question the validity of Fish and Wildlife’s decision not to list the bird,” he said. “What they talk about as flexibility I call loopholes big enough to drive a Mack Truck through.” In a statement, Gov. Brian
Sandoval said his office will be reviewing the proposal but did not comment on the specific elements of Nevada’s plan that the BLM would change. “I look forward to reviewing the draft Environmental Impact Statement and I trust that the Department of the Interior will continue to engage with and value the opinions of all the stakeholders. I am confident we can find success by working together,” Sandoval said. Sandoval, last year, had expressed concerns that one provision in an earlier iteration of recommended changes could have conflicted with how the state manages wildlife. Those changes to do not appear to have made it into the report released on May 2. Other governors, including Colorado Gov. John Hickenlooper, a Democrat, and Wyoming Gov. Matt Mead, a Republican, had warned the BLM against making any “wholesale changes.”
Colorado and Wyoming’s sage grouse management plans were addressed in separate reports, but Hickenlooper said his state’s plan would be made “stronger” by the proposed changes, according to E&E News. Mead did not comment on the specific changes but, like Sandoval, said his office was reviewing the document, according to the Casper Star Tribune. The BLM said it will hold public meetings on the proposal in the coming weeks. The reports account for only one aspect of the Trump administration’s efforts to ease sagegrouse restrictions. Through executive actions, the administration has instructed the BLM to open up more sage grouse habitat to oil and gas leasing, including in Nevada. Environmental groups filed lawsuits that claimed the administration, through these actions, was “systematically” unraveling the 2015 sage grouse plan.
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46 • MINING QUARTERLY • SUMMER 2018
ELKO DAILY FREE PRESS, Elko, Nevada • 47
SUZANNE FEATHERSTON
U.S. Environmental Protection Agency Administrator Scott Pruitt says the cleanup plan for the Anaconda Copper Mine represents the agency’s results-focused way of operating. He and Gov. Brian Sandoval signed a deferral agreement Feb. 5 to keep the site off the Superfund National Priorities List.
ENVIRONMENTAL
Anaconda pulled from Superfund list MINING QUARTERLY T he U.S. Environmental Protection Agency released an updated Administrator’s Emphasis List of Superfund sites on April 16 that no longer includes the Anaconda Copper Mine in Nevada. “We are making tremendous progress expediting sites through the entire Superfund remediation process,” said EPA Administrator Scott Pruitt. “The updated Emphasis List reflects our commitment to addressing Superfund sites as quickly and safely as possible.” Pruitt has been at the helm of efforts to streamline and improve the program, and accelerate the cleanup and reuse of America’s most contaminated sites. He has visited the Anaconda Copper Mine as part of his effort to ensure timely decisions for cleanup of the sites to protect the health and environment of surrounding communities.
The Anaconda Copper Mine site covers more than 3,400 acres in Lyon County, approximately 65 miles southeast of Reno. The site includes groundwater contamination, tailings piles, waste rock areas and contaminated process areas. On Feb. 5, Pruitt and Nevada Gov. Brian Sandoval signed a National Priorities List Deferral Agreement to defer the site to Nevada. Under deferral, cleanup at the mine must achieve the same level of human health and environmental protection as a site on the priority list and must meet all applicable federal and state requirements. EPA will review whether remedies are protective and will retain responsibility for the response actions on Tribal Land. The initial list – consisting of 21 sites across the country – was released on Dec. 8 in response to Superfund Task Force Recommendations.
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48 • MINING QUARTERLY • SUMMER 2018
NEWS
SUBMITTED PHOTOS
Kinross Gold Corp.’s Bald Mountain Mine employees celebrated surpassing the company’s goal to produce 278,000 ounces in 2017.
Kinross milestones Bald Mountain celebrates production, expands mine
MINING QUARTERLY After record gold ounce production in 2017, Kinross Gold Corp.’s Bald Mountain Mine is tackling an expansion to extend mine life and further enhance production. Bald Mountain produced more than 282,000 ounces of gold in 2017, exceeding the year’s target of 278,000 ounces. Continuing to deliver strong results, the open pit gold mine outside of Eureka achieved excellent production, tons mined and cost metrics in the first quarter of 2018, the company announced in its Q1 report. “The high performance culture that our employees embrace has been key to our success at Bald Mountain Mine,” said Clint Nebeker, mine operations manager for the Kinross Bald Mountain Mine. “The mine has
a challenging, but high-potential deposit and we believe that is, in part, what attracts the best miners in the business to work here.” The company also moved forward with construction of the Vantage Complex Project, a development in the southern portion of the 26-mile-long mine property. The project remains on schedule with commissioning for the heap leach pad and processing facilities expected to commence in the first quarter of 2019. Earthworks are underway, engineering is approximately 90 percent complete, and all major permits have now been received. Additionally, the Vantage Complex is expected to house a new 8,100-gallon-per-minute carbon adsorption plant, maintenance shop, administrative building and supporting infrastructure. “The Vantage Complex Project construction is well underway with great dedication and
Employees of Kinross Gold Corp.’s Bald Mountain Mine celebrate a record year of gold production with commemorative sweatshirts.
enthusiasm from both employees and contractors working on the project,” said Don Weeks, Vantage Complex manager for the Kinross Bald Mountain Mine. “This is a very exciting project for Kinross and Bald Mountain Mine, as the Vantage Complex Project is expected to extend mine life, giving us the ability to contribute to surrounding communities for years to come.”
The Vantage Complex is expected to provide access to untapped resources and enable the mine to continue to deliver strong production. “With safety at the forefront of daily activities and environmental stewardship a constant priority,” the company stated in a release, “Bald Mountain Mine is excited to responsibly deliver on 2018 targets.”
50 • MINING QUARTERLY • SUMMER 2018
TOP STORY
Healthier heavy equipment High-tech monitoring extends machine life at Newmont mines
STORY AND PHOTOS BY SUZANNE FEATHERSTON Mining Quarterly editor
ELKO — From a trio of computer screens in a small, corner office at Newmont Mining Corp. in Elko, condition intelligence analyst Jess Sanchez helps monitor the health of more than 150 pieces of mining equipment at five mine sites in the United States. Newmont formed the Asset Health Center to monitor health-based trends in mining equipment that “if not checked or resolved could lead to catastrophic failure,” said Jason Nitz,
Newmont principal adviser, mine monitoring and control, who likened the program to keeping up with service on personal vehicles. “It’s all about extending component life.” Spreadsheets and graphics portray an array of statistics collected and averaged by technology on equipment such as haul trucks, shovels and drills. The visual snapshots allow analysts including Sanchez to identify maintenance or driver-induced issues then send action recommendations back to the sites. Recommendations come with Jess Sanchez, Newmont condition intelligence analyst, monitors data priority levels, from equipment on mine equipment health at five sites from the company’s Asset Health needing immediate attention to Center in Elko.
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requiring upkeep at an already scheduled preventive maintenance appointment. Ultimately, asset health monitoring saves the company money by helping prevent equipment failure and losses in production time. This year, the mining company plans to add another approximately 50 mining machines to the monitoring program with the inclusion of a fleet from the Merian mine site in South America. The Asset Health Center also serves Newmont’s four Nevada sites and the Cripple Creek & Victor Gold Mine in Colorado. “That’s where the center is starting to become more global than regional,â€? Nitz said, explaining that leaders at other Newmont mines worldwide could choose to opt into the program. “It’s all about whether it makes sense and value to do it. ‌ There’s definitely a lot of interest around Newmont [in
the program].� Growth means Newmont seeks to hire two more analysts and a manager for the center, which might outgrow its cozy office space at the North American Regional Office. Analysts each monitor about 50-60 pieces of equipment. The center operates five days a week for 10 hours but will span seven 12-hour days in the future. Another goal is to include a wider variety of equipment types and more underground equipment. The monitored fleet is made up of mostly haul trucks, but other machinery can be equipped with technology that transmits data, too. Tools from various brands can be included as long as they communicate with the Cat Minestar Health system that Newmont uses to collect data. Dingo Trakka then consolidates the information. “You can monitor critical
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on-site but with varying levels of success because not every location had an employee specifically dedicated to the task. Now when site managers receive the recommendations for action, they have the option to reject it — but statistics over the past few months show that only 2 percent do. Change presented a challenge that the company overcame by inviting sites’ maintenance management teams to participate in planning and training. Newmont conducted a pilot program in early 2017 to test the communication links and data quality. For Sanchez, who previously worked with a similar monitoring system at the company’s Twin Creeks Mine, the change was welcome. “I loved it back in 2013,� he said, “but I love it even more now because we have more tools.�
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PEOPLE
Q&A with Leslie Maple | SUZANNE FEATHERSTON Mining Quarterly editor
For a strong work ethic and leadership in her field, Leslie Maple with Barrick Gold Corp. was recognized this month with a 40 Under 40 award in Las Vegas. The award honors professionals in Southern Nevada who demonstrate community serMaple vice, an entrepreneurial spirit and have an impact on their respective industries. The former Elko resident earned her degree in political science from the University of Nevada, Reno, and has lived in Nevada for all of her 39 years. She joined Barrick as a training
planner at the Cortez operations about eight years ago and worked her way up to become the manager of communications and corporate affairs with the communications team based in Henderson. What was your role in helping develop the company’s community relations strategy? We had begun working on, in conjunction with the Nevada Mining Association, helping the state understand the business of mining and how it contributes to the economy and the importance of mining. Through that work we identified — we being my boss Michael Brown and the leadership at Barrick — that in order to help people in the southern part
Barrick’s manager of communications and corporate affairs wins award
of the state where mining is not tangible that we needed to have a presence here. At the time we planned to open a small office that would house about 30 information technology professionals. It has just grown since them. Through that Barrick has a corporate social responsibility policy. The company’s philosophy is to support the community. I have a dual role in that I manage communications, and I also do a lot of community outreach here to support our host community. So once they decided to put the office here, I worked really closely with Michael Brown who is Barrick’s regional president to continue the strategy we already had for supporting Southern Nevada and to grow it, and make sure it supported the community
outreach program that was engaging our employees as well. Since the office opened, some of our leadership in Toronto decided that we would grow the office so now we have, in addition to our IT staff, folks from supply chain, people from finance and payroll, and we recently expanded and opened CodeMine 2.0 here in Henderson. Everyone here supports the global operation. Why are the organizations that you and Barrick support important to you personally and professionally? One of the main groups I support, and I actually serve on their board, is Communities in Schools. That’s an organization that I was exposed to prior to
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ELKO DAILY FREE PRESS, Elko, Nevada • 53
working for Barrick in Elko. I think it’s such a great program because our state continues to struggle for issues in education, and they look at each child [having problems and find the root cause]. The program is great because they put a coordinator who can really manage, talk to those kids, to figure out what those problems are and then help find support for them through community programs. It’s great because it lets teachers [focus on teaching] and connects students and the parents to the services they need so the kids are successful at school and beyond. Also for Barrick, our company recognizes the importance of education and keeping really qualified students and graduates in the state. The company supports education from all levels, starting at the preschool level with our support of Communities in Schools up through the university system and our
SUBMITTED
Leslie Maple, Barrick’s USA manager of communications and corporate affairs, guides a tour of the Cortez Hills underground mine.
support to Great Basin College, University of Nevada, Reno, and UNLV. I also serve on the board of the McCaw School of Mines. The McCaw Elementary School here in Henderson is actually a magnet school that focuses in STEM [science, technology, engineering and math] with an emphasis on geology. Several
years ago, the principal decided to reference [Henderson’s history as an old mining town], and they built the McCaw School of Mines Foundation. On the property of the elementary school, there is a model underground mine, and the kids from the elementary school get to be the docents and give tours of the mine. They learn a lot about the mine, the history
of mining and minerals that are produced in Nevada. It’s one of the only free tours that is offered to the Clark County School District, and it’s offered up to the fourth-grade level. Teachers can sign up and bring students at no cost through the mine, and they get good STEM education about minerals and mining, and importance of mining to everyday life.
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54 • MINING QUARTERLY • SUMMER 2018
Peter Munk
Matthew Gili
Misty Rogers
Catherine Raw
Barrick Gold Corp.’s founder and chairman emeritus Peter M u n k died March 28 in Toronto at age 90. Munk, an iconic Canadian entrepreneur and philanthropist, was born in Budapest in 1927 and immigrated to Canada in 1948. He founded Barrick in 1983 and built it into the world’s largest gold mining company in less than 25 years.
role as chief operating officer effective May 31. Kevin O’Kane succeeded Pangbourne as COO effective June 4. O’Kane has more than 30 years of international experience developing and operating mines. Since joining BHP early in his career, his focus and success has been leading safety and productivity improvements, cost reductions, organizational and cultural change processes, including the Escondida mine in Chile, the world’s largest copper mine. O’Kane joins SSR Mining having most recently been asset president, Pampa Norte, BHP Minerals Americas. He holds a Bachelor of Applied Science degree from Queen’s University in Kingston, Ontario.
having served in a variety of senior executive roles at Barrick and Rio Tinto. Gili holds a bachelor’s degree in mining engineering from University of Idaho and an Idaho professional engineer certification.
Catherine Raw, chief financial officer of Barrick Gold Corp., won the Young Mining Professional of the Year Award for 2017, according to the winter issue of Barrick Beyond Borders. She has masters’ degrees in natural sciences and mineral projects appraisal, and before joining Barrick in 2015, had worked as the fund manager for mining and gold equity funds at BlackRock. The award is presented by Young Mining Professionals, a nonprofit dedicated to advancing the global profile and leadership of the mining industry.
People of Mines
e Co ba l t So l u t i o n s I n c. appointed Darby Stacey to the role of mill and processing manager. Stacey will be responsible for leading all mineral processing and metallurgical activities for the company’s Idaho Cobalt Project in the historic Idaho Cobalt Belt near the town of Salmon, Idaho. Stacey has more than 13 years of experience in base metals extraction and water treatment. He previously worked for Lundin Mining Corp.’s Eagle mine, Rio Tinto’s Greens Creek Mine and Resolution Copper. eCobalt’s Idaho Copper Project is the only environmentally permitted primary cobalt project in the U.S.
N e va d a C o p p e r C o r p . appointed Matthew Gili as president and CEO effective May 1. Gili was previously at Barrick Gold Corp., where he served as executive general manager for the Cortez District, more recently as chief technical officer and senior vice president, operations projects. Gili SSR M ining Inc.’s A l a n has more than 20 years of expePangbourne retired from his rience in the mining industry,
The Manufacturing Institute awarded Misty Rogers of ESCO Corp. the Women in Manufacturing STEP and Ahead Award. The award honors women who have demonstrated excellence in leadership in their careers and represent all levels of the manufacturing industry. Rogers began her career with ESCO — a company that engineers, manufactures and services mission-critical equipment used by companies in mining, construction, and industrial markets — 21 years ago as a bookkeeper at the first ESCO-owned retail facility. She now serves as a North American Systems Manager, and is experienced in Salesforce, Kronos, SharePoint and Oracle. In addition to being a part of a team that developed a successful total end-to-end process, Misty was integral to the opening of all retail ESCO locations across the U.S. and Canada.
Comstock Mining Inc. elected Walter A. “Del” Marting to its board of directors after the retirement of Daniel W. Kappes, after six years of service. Kappes will remain involved with the company as a member of its recently established Mining Advisory Committee, to assist in all aspects of technical mining and mine development. Marting started his mining career with Amax Inc., served as vice president of Administration for Amax Europe and was the chairman and CEO of Lucky Chance Mining Co. based in Nevada with a mine in California.
ELKO DAILY FREE PRESS, Elko, Nevada • 55
ENVIRONMENTAL
Mineral Ridge plans changes 1865, when it started at the site in 2011. Work began with the crushing of oversized ore left on the pad by the previous owners, the EA reports, and mining new ore kicked off in May 2011. Commercial production began in January 2012, according to Scorpio Gold Corp., which owns 70 percent of the Mineral Ridge Mine, with joint venture partner Elevon LLC controlling the remaining 30 percent. Historically, the mine produced 575,000 ounces of gold from open pit and underground operations, according to the EA. Total production in 2017 totaled 19,045 ounces of gold and 10,203 ounces of silver, according to the 2017 year-end report from Scorpio Gold. Mining was suspended in
early November 2017 because of higher strip ratios and limited pad capacity, Scorpio Gold reported, but diminishing gold recoveries continues from the leach pads. Management expects to generate limited revenues from residual but diminishing gold recoveries from the leach pads until approximately July 2018, according to Scorpio Gold’s first-quarter results. Diminishing revenues and the maturation of principal on debt means the company’s 2018 focus is raising financing that would allow it to proceed with construction. Scorpio Gold is a Canada-based gold producer that also owns 100 percent interest in the Goldwedge property in Manhattan, Nevada, which is on care and maintenance.
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MINING QUARTERLY P roposed developments for the Mineral Ridge Mine in Esmeralda County could add 18 years to the mine life and increase opportunities to extract additional gold and other metals. Elko-based Mineral Ridge Gold LLC requested an amendment to its plan of operations and reclamation permit for the open pit heap leach mine, located about 5 miles northwest of Silver Peak in Esmeralda County. The proposed project is on Bureau of Land Management and private lands, and the BLM published an environmental
assessment March 6. The EA can be viewed at http://Goo.gl/ Ca9Wt6. The Custer Amendment would allow the construction of an ore storage pad and a water treatment plant, and the development of three pits and associated underground workings. MRG also requests the ability to expand existing leach pad and conversion to a dry-stack tailings storage facility; and modifications to existing waste rock dumps, crushing facilities, pits and pit backfill. Plan of operations boundaries would expand by 1,396 acres while increasing the authorized disturbance area by 17 acres, or 2 percent. The company extended the area’s history of intermittent mining, which began in about
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56 • MINING QUARTERLY • SUMMER 2018
NEWS
SUBMITTED
Gold Resource Corp. earned all regulatory approval to build the Isabella Pearl gold mine project in Mineral County’s Santa Fe Mining District near Luning.
New gold mine wins approval
SUZANNE FEATHERSTON Mining Quarterly editor
Gold Resource Corp. recently obtained all regulatory approvals required for the Isabella Pearl open pit heap leach gold project
in Mineral County. “We are pleased to have successfully navigated the permitting process and now shift our efforts to construction of our first Nevada gold project, the Isabella Pearl,” said Jason Reid, CEO
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and president of Gold Resource, in a statement May 15. A positive record of decision on an environmental assessment from the Bureau of Land Management, announced May 10, was the last step in the
permitting process to allow construction, operation and the pouring of doré at the project. First production is targeted to begin in fewer than 12 months. The company previously acquired permits for mercury
ELKO DAILY FREE PRESS, Elko, Nevada • 57
and water, the Nevada Department of Environmental Protection approved the plan of operations and the board of directors approved moving the project forward. Permitting took approximately five years, including efforts by the previous private owner. C o l o ra d o - b a s e d G o l d Resource is a producer, developer and explorer with a producing operation in Mexico and projects in Nevada. Operating in Nevada diversifies the company’s portfolio into two mining jurisdictions and should increase overall production and revenue. The Isabella Pearl project has the potential to double Gold Resource gold production and increase revenue by 75 percent, said Greg Patterson, Gold Resource vice president of corporate development.
“In the United States, there is really not a better place to operate than in Nevada,” Patterson said. Its Isabella Pearl project lies on public land 108 miles southeast of Reno in the Walker Lane Mineral Belt, covering 494 mining claims on 9,000 acres, according to the environmental assessment; total disturbance area is 490 acres. The project will be developed and operated by Walker Lane Minerals Corp., a wholly owned subsidiary of Gold Resource. The first recorded mining operations in the Santa Fe Mining District dates to the 1930s. Previous owners that conducted exploration starting in the late 1980s include Combined Metals-Homestake and TXAU Investments Ltd., according to the environmental assessment. Walker Lane Minerals acquired
the property in August 2016. The project’s proven and probable reserve totals 192,600 gold ounces. The mine is estimated to produce about 153,000 gold ounces over an initial four-year mine life, with 29,000 ounces the first year and increasing to 42,000 in year four, the company stated in a news release. Future exploration and drilling could add to the project’s reserves. “The project targets more than doubling the company’s annual gold production profile with material, substantial and accretive gold ounces,” Reid said. Initial capital expenditure is estimated at $30 million, and Gold Resource has already spent about $10 with cash and equipment financing, including a doré process plant and mobile equipment designed for quick setup and commissioning. Reid said company leaders hope to
complete the project with cash and cashflow. Construction is expected to take about a year, and the company plans to break ground as soon as reclamation bonding has been secured. Contractors for heap leach pad construction and mining will be named soon. Once in operation, the project could create about 40 direct employees through a subsidiary, GRC Nevada Inc., and 35 additional employees through a contractor. “Long term, we view Isabella Pearl as the first of several potential operating projects from our Nevada Mining Unit’s profile of potential high-grade gold properties,” Reid said. “We believe both the state of Nevada and the local communities in which we operate will benefit from the positive economic impact from our operations.”
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58 • MINING QUARTERLY • SUMMER 2018
Industry Ingots Mining industry news briefs
Site of Komatsu America’s new North American headquarters in Chicago Triangle Plaza
A view from General Moly’s Mt. Hope project in 2013
K inross Bald Mountain donated $5,000 to Elko High School for a new sound system. The contribution helped the school replace a 15-year-old system with a control panel and speakers in the Centennial Gymnasium. Alissa Wood, Kinross corporate social responsibility specialist, said the donation was in recognition of the company’s employees who have children attending EHS. Bonanza Goldfields Corp. acquired the Thunder Mountain Gold Project in Nye County between Tonopah and Round Mountain, bringing its total mining projects up to four properties. The Thunder Mountain project is comprised of 17
unpatented lode mining claims on Bureau of Land Management ground. Because of its acquisition of Thunder Mountain, Bonanza Goldfields elected not to proceed with acquisition of mining properties at Chloride, Arizona, or Goldfield, Nevada. Tonogold Resources Inc. invested approximately $1 million toward the evaluation and assessment of Comstock Mining Inc.’s Lucerne Mine Project’s resource and preliminary economic feasibility in the first phase of an option agreement. Tonogold also paid Comstock an additional $2 million for the right to extend the option. The option agreement established a series of See Ingots, 60
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60 • MINING QUARTERLY • SUMMER 2018
Ingots From 58
A load haul dump and a jumbo drill were hoisted down a shaft at Pumpkin Hollow in April 2015.
requirements, including technical and financial analysis, along with additional funding milestones for Tonogold to earn a share of the company’s Lucerne Mine Project. Komatsu America Corp. announced plans to move company headquarters to Chicago in 2020. The new site at Triangle Plaza, 8770 W. Bryn Mawr Ave., will feature a new, open floor plan designed to reinforce the company’s focus on cross-discipline collaboration that drives customer-first solutions and services. General Moly Inc. reported March 1 that it has identified a potential highgrade, copper-silver exploration target along with a significant zinc mineralized area at the Mt. Hope Project site, southeast
of the Mt. Hope’s molybdenum deposit in central Nevada. Because of the copper-silver target and zinc mineralization, General Moly undertook a high-intensity, ground-based induced polarization survey to determine if potential continuity and the size of the mineralization would justify additional exploration and evaluation. The IP survey was completed in February 2018 by Quantec Geoscience and indicates a fairly continuous group of high chargeability anomalies that appear aligned with the recently identified copper-silver target. Recent mine development milestones marked by Nevada Copper Corp. position the company to restart construction of the Pumpkin Hollow underground copper project. Nevada Copper Corp. announced May 10 that it signed a preworks contract with Cementation USA Inc.
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This map shows the historic expansion of the Tuscarora Gold project recently acquired by American Pacific Mining.
The mining contractor, which worked on the project in 2013, will prepare an existing shaft and hoist for the restart of underground construction. The shaft is approximately 1,900 feet and is 250 feet from completion. The company also has secured long-lead items — including components for a process plant and mobile and underground mining equipment — and is transitioning from care and maintenance to active status. To r q R e s o u r c e s I n c. acquired the Speedway Gold Project in western Utah, near the Nevada border. The Speedway property is approximately 2,668 acres of prospective terrain that hosts a large gold-in-bedrock anomaly. This leads Torq’s technical team to believe that the underexplored area represents an early-stage,
Carlin-style gold target. The company paid $25,000 upon signing and will be required to pay steadily escalating annual lease payments as well as the underlying claim fees. There is no required work commitment and the lease agreement can be terminated at any time after one year. The lease agreement may be bought out at any time for $1 million, subject to a buyable 2 percent royalty to the underlying owner. Trifecta Gold Ltd. optioned the Yuge Property, a high-grade gold prospect in northern Nevada, from Silver Range Resources Ltd., the company announced Feb. 28. The Humboldt County property covers the Columbia and Juanita mines, which produced on a See Ingots, 62
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62 • MINING QUARTERLY • SUMMER 2018
Ingots From 61
Haver & Boecker Tyler L-Class vibrating screen
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small scale between 1870 and 1937. The most recent reported production was 2,350 tons of oxide ore in 1936-37 from the Columbia Mine. Trifecta Gold and Silver Range Resources commenced exploration work in April. American Pacific Mining Corp. expanded Tuscarora Gold by staking an additional 67 claims in Elko County, the company announced March 19. The 24-claim, 447-acre project, about 13 miles from the Jerritt Canyon deposit, increased in size to 91 claims and 1,818 acres. Tuscarora consists of two previously tested, high-grade gold drill targets, the South Navajo and the East Pediment zones. The company launched a drill program that includes an initial 7,500 feet of
drilling, or approximately 10-12 holes. Results will be evaluated and then a second stage of drilling will complete the approximate 19-hole program. Haver & Boecker, an equipment manufacturer and solutions provider for aggregates and mining applications, announced that it offers the Tyler L-Class vibrating screen for classifying wet or dry material and dewatering method. Producers can customize the 6-foot-wide machine in two lengths, 16 and 20 feet length. Primarily mounted horizontally, the L-Class can also be inclined or declined as much as 3 degrees. The linear L-Class handles up to 400 tons per hour and features a 45-degree mounted double-shaft overhead drive system with directmounted motors. Epiroc introduced specialized tunneling tools, t h e S B 3 02 a n d S B 45 2
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Tunnel versions of the Solid Body breaker range. The modifications aim to extend equipment life and reduce operating costs in underground applications. The special tunneling tool with a collar supporting a robust front shield and dust cover minimizes the dust intake when working on overhead areas. Two restrictors are available which enable the performance of the hydraulic breaker to be adjusted for either traditional scaling operations or for more challenging rock breaking jobs. Epiroc released automation features for the Scooptram underground loader in May. The Scooptram Automation Regular package allows the Scooptram to be controlled through an operator station from a remote location. An operator can control the loader while out of sight or transition from manual to automatic mode. The company states that
the package, which includes cameras, sensors, safety modules and a safety system, allows customers to automate a single loader without much expense or extensive infrastructure alternations. Aiming to kick off the first primar y vanadium mine in North America, Prophecy Development Corp. submitted a plan of operations for the Gibellini vanadium project in Eureka County to the Bureau of Land Management. The submitted plan, announced May 9, was prepared by SRK Consulting (U.S.) Inc. with more than 1,100 pages of detailed development plans for an open pit mine and processing facilities. The Gibellini Project is expected to produce an average of 15.7 million tons of ore containing 120.5 million pounds of vanadium over a seven-year mine life. The company hopes Prophecy Development Corp. shows core samples in an online video to acquire permitting by 2020. promoting its Gibellini vanadium project.
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64 • MINING QUARTERLY • SUMMER 2018
BUSINESS
Balanced resources SWCA offers cultural, environmental consulting
SUZANNE FEATHERSTON Mining Quarterly editor
An ancient Western Shoshone prayer site might not have any remaining artifacts to prove its cultural significance, but when asked, the people say the place has been sacred for centuries. That’s what Matt Edwards, the cultural resources program director for SWCA Environmental Consultants, discovered when he spoke with tribe members about their connection to lands encompassing the Hollister Mine outside of Winnemucca.
SUBMITTED
Crews from SWCA Environmental Consultants study a mining project in northern Nevada.
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culturally significant Rock Creek lands, to the Western Shoshone in summer 2017. The mining company wanted a consultant that would go beyond looking at physical remains to build a better history of the area and build relationships. “For the Shoshone, it’s a bigger vantage point,” said Lucy Hill, Klondex’s director of environmental services and community relations. “It’s about the use of land in earlier times. You can’t document that this was a prayer site. Being able to talk to the Klondex Mines Ltd. contracted Shoshone to know that that is SWCA to study the cultural where there were prayers” is the resources in the Hollister Mine kind of work that the consulting area ahead of its transfer of more than 3,200 acres, including the See SWCA, 66
ELKO DAILY FREE PRESS, Elko, Nevada • 65
SUBMITTED
Crews from SWCA Environmental Consultants study a mining project in northern Nevada.
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SWCA From 64
group does. For SWCA, balancing natural and cultural resources with beneficial projects such as mines is about more than generating reports and identifying artifacts. The work is about sitting down with the people who matter. “Taking this consultant role seriously, as opposed to being a scientist for hire, is something we try to cultivate here,” Edwards said. “We are doing our best with our relationships with our agencies and relationships with our clients to find the most straightforward and best solution for our client.” SWCA, established in 1981 and headquartered in Phoenix, has about 30 offices all over the country, including in Las Vegas and Salt Lake City with a satellite office in Reno. The
employee-owned environmental consulting company has about 800 staff members. Unlike most of its competitors, SWCA foregoes engineering services in favor of focusing on environmental consulting. The company has a mining business line led by David Steed that serves clients in the Great Basin, including Nevada, and the Intermountain West. “I would say mining is one of our biggest market sectors in Nevada,” Edwards said. Consultants can travel all over the U.S., but many are experts in a specific region. “As scientists, we have specific knowledge of the Great Basin region for archeology,” said Lindsey Kestler, project manager and archeologist in SWCA’s cultural resource program. Other mining clients include companies in Nevada and Arizona. Past efforts include providing permitting support for
some of the nation’s largest mining operations, according to SWCA’s website. Klondex first began working with SWCA for cultural resources services at the Fire Creek Mine. Now, SWCA works at all the company’s mines, adding Hollister, Aurora and Midas. SWCA is expected to continue working for Hecla Mining Co. after acquiring Klondex and forming Klondex Canada. “Ever since I started working with [Edwards] at Fire Creek, I’ve dragged him to every single mine we’re at,” Hill said. “He’s just so very thorough.” For mining clients, SWCA’s consultants develop resource plans, environmental assessments, policy act assessments and more through a combination of office and field work. The group also helps host public workshops to educate the public about projects, and interfaces with the land management
agencies in the state. “They follow the letter of the law so they keep this company — Klondex — safe from prosecution, from not breaking the law,” Hill said. “That is a huge responsibility.” The openness that SWCA shares with its sources and the public also applies to the mine operators. Hill described how although Edwards cannot legally tell her exactly where he finds certain artifacts on mine property, he will outline the basic information and explain the mining company’s options. “He’ll sit down and walk you through you through the pros and cons,” Hill said. “It gives you more flexibility in the decision-making.” In the long run, that approach helps the project, Hill said, but it also protects resources and creates “a better understanding of who was here first and what they have done.”
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68 • MINING QUARTERLY • SUMMER 2018
BUSINESS
On a past and a prayer
Pray & Company provides solutions for mining industry ADELLA HARDING
Mining Quarterly correspondent
P ray & Company HR and Business Solutions LLC offers an array of services for the mining and construction industries, ranging from job recruitment, leadership training and human resources strategies to communications and public relations. The business is concentrated in Nevada and Arizona, states that have large mining industries, but Pray & Company has clients in several Western states, as well as
South Carolina. “We’re specifically focused on small to mid-size companies,” said Rhonda Zuraff, who partnered with Dana Pray in the company and is a former longtime Spring Creek resident now based in Arizona. “The largest is about 1,600 employees, however, that’s not our niche. The typical client has less than 400 employees,” said Pray, a longtime Elko resident based in Elko. “We go to the clients and their places of operation,” Zuraff said. “The majority of our work is conducted at the client’s location.” They also said they plan to be at the Elko Mining Expo June 7-8
we drill rock.
we provide daTa.
at the Elko Convention Center, Both are members of the Socialthough they won’t have a booth. ety for Human Resource Management, the American Exploration and Mining Association, and Beginnings Each partner has experience in the Arizona General Contractors the mining industry in Nevada, Association. and they bring different skills to Pray started the company doing the company. job searches in spring 2017. Then, Pray has more than 20 years of she and Zuraff talked about going leadership experience in human into business together, seeing a resources and finance in the staff- need in the construction, mining ing and mining industries. Zuraff and heavy industrial sectors to has more than 20 years in oper- offer their experience in human ations, communications, public resources and public relations. relations and human resources in “From there, we also identhe media and mining industries. tified synergies for these comHer media experience included panies in terms of offering working for Lee Enterprises, outsourced commercial lines of which publishes the Elko Daily insurance and payroll services, Free Press and Mining Quarterly. including health and workers’
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ELKO DAILY FREE PRESS, Elko, Nevada • 69
compensation plans,” Zuraff said. She became a licensed insurance agent in Nevada, Arizona and Utah and joined Integrated Insurance Solutions to provide those services. “I love to help small businesses,” Pray said. “I feel we make a difference. It is exciting to me, particularly in mining and construction. We can see what we’ve done and can work directly with decision-makers. We get to see the results. It’s very rewarding for me.” “It certainly has been an adventure. It’s been very fulfilling for me, as well,” Zuraff added.
but in bringing clients a good workforce,” Pray said. They recruit for managers but also for workers in technical fields and skilled trades. Pray said they also go into colleges and trade schools. Zuraff said that “one of the largest areas of need for all of our clients remains recruiting for skilled trade positions. Pray & Company is employing a multi-prong approach to offering a skilled trades program for clients that includes a variety of partnerships and efforts with trade schools in Nevada, Utah and Arizona.”
Recruitment
Industries
Filling jobs for clients is one Both women said they are seetask where the partners can ing growth in the mining indussee results. try, gold and other minerals. “One of our segments is “We’re seeing an uptick in recruitments for our clients, and underground mining,” Pray said. Pray & Company doesn’t have both Rhonda and I found our networks have been valuable, not only on the marketing side See Pray, 70
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Pray & Company HR & Business Solutions partners Rhonda Zuraff, left, and Dana Pray, right, talk with a potential client at a construction site in this photo staged when Zuraff and Pray were together in the Elko area in early May.
70 • MINING QUARTERLY • SUMMER 2018
Pray From 69
any mineral exploration companies as clients, but they said they would welcome the exploration sector. They do have clients that do exploration as part of their operations, however. Along with mining, the partners are tapping into the Association of Building Contractors to work with the construction industry. Pray said the construction industry is involved with the mining industry, as well, because mines are often expanding. ALLUSIVE IMAGES
Training
They also do training and leadership coaching for clients. Pray is certified in coaching and training. “That’s something I enjoy immensely, working with leaders to hone their skills,” she said. Pray & Company also can educate clients about how to best
Rhonda Zuraff, left, and Dana Pray are the principals in their company called Pray & Company HR & Business Solutions. Zuraff is based in Arizona, Pray in Nevada.
work with the millennial genera- to the point they are adding a tion, the younger workers whose few support staffers in Arizona outlook in jobs is different from and Nevada. their parents’. “What makes Rhonda and I successful is we are very flexible Growth with clients’ needs,” Pray said. Pray & Company is grow- “It’s about business relationing from just the two partners ships, and we take the time to be
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72 • MINING QUARTERLY • SUMMER 2018
NEWS
Barrick invests in Midas Gold SUZANNE FEATHERSTON Mining Quarterly editor
TORONTO — A “compelling investment proposition” prompted Barrick Gold Corp. to enter an agreement to acquire almost 20 percent common shares of Midas Gold Corp. The $38 million transaction could help Midas Gold advance progress at its Stibnite Gold Project. “We are excited to announce a new partnership that will help make the Stibnite Gold Project a reality and get Midas Gold across the permitting and feasibility finish line,” Midas Gold Corp. stated on its blog. Barrick announced May 9 that it expects to invest in 46,551,731 common shares for gross proceeds of $38,065,907. .
“Midas Gold’s Stibnite Gold project in Idaho offers a compelling investment proposition, with low geopolitical risk, potential for production of over 300,000 ounces of gold per year at competitive operating costs, and exploration upside,” said Barrick President Kelvin Dushnisky in a statement. The Stibnite Gold Project is near McCall, Idaho. The site has the potential to produce 388,000 ounces of gold per year for the first four years from the fourth-highest grade open pit in the U.S., according to Midas Gold. From construction to final reclamation and closure, the company expects the project to create more than 1,000 jobs, according to a 2017 community presentation.
Before operations can begin, however, the company must progress through years of regulatory review by 11 state and federal agencies and acquire about 50 permits. The process is sensitive because the district, which encompasses part of the East Fork of the South Fork of the Salmon River, experienced heavy environmental disturbance from historical mining. About $1 billion in capital is required for the Stibnite Gold Project, according to a Midas Gold 2016 plan of restoration and operations. The Canada-based company with offices in Idaho submitted plans to the U.S. Forest Service in 2016 to develop the gold and antimony operation while repairing past environmental damage. Environmental efforts
would include reconnecting waterways, repairing water quality, re-establishing topsoil, creating wetlands, and removing and processing past tailings. “Midas Gold is in the midst of advancing the Stibnite Gold Project through completion of a feasibility study and permitting for site restoration and redevelopment,” said Stephen Quin, president and CEO of Midas Gold, in a statement. “With our detailed plan for site restoration and protection of the environment, a large, long-life and low-cost operation, and a comprehensive proposal for the closure and reclamation of the site, Midas Gold is positioned to complete the critical milestones of feasibility study and permitting.”
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ELKO DAILY FREE PRESS, Elko, Nevada • 73
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74 • MINING QUARTERLY • SUMMER 2018
TECHNOLOGY
Accuracy through automation From ore to Oreos
O
pen your hand. Do you see it there? Sitting snugly in the crook of your palm is a combination of two delicious chocolate wafers with a terribly sweet cream filling sandwiched in between. You pinch the delightful concoction between two fingers and JIM ADAMS read the letters across the middle: O-R-E-O. Then you notice another in your other hand. There’s another on the table in front of you next to a tall glass of milk. Next to that glass is
the rest of the package. Go on, treat yourself. Since 1912, the Oreo has been a staple of our snack food consumption. It’s iconic look, taste, even smell, has barely changed in more than 100 years. Imagine, though, that upon finishing the first cookie in your hand, and pouncing on the second, you notice a slight difference. Maybe it’s the taste, not as chocolaty as the first; or the size, a bit smaller. Then you notice the whole package is just a bit … off. Some are spelled wrong, others are ovals or rhomboids. At this point, no one would fault you for putting down the Oreos and going in search of Nutter Butters. We have one thing to thank ELKO, NV
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for ensuring virtually every single Oreo is the same: automation. Automation was first implemented in 1968 by the automatic transmission division of General Motors. The desire was to find a way to phase out large banks of hard-wired relays used in production. While efficient, they were bulky, slow, and in constant need of repair. This led to the design of the first PLC, or Programmable Logic Controller, a computer system designed to operate the phasedout relays using Ladder Logic, a programming language designed specifically to look like an electrical diagram. Fifty years later, PLCs, along with all affiliated automation products and devices, have progressed a long way. Even today with the
power that personal computers have, even the biggest, baddest, and fanciest of them all couldn’t hold a candle to the average $1,500 PLC. The reason is continuity. A computer, while amazing in what it can do, tries to do too much. It likes to please its user. Would you like to open a program? Sure. Want to play a song?
Totally. Want to write an email to your mom? Absolutely! A computer can do all these things for you at once. The problem is, though, that doing all these things at once means it cannot do all
of them as efficiently as doing tasks one at a time. A PLC is designed to do only one thing at a time, and it does this extremely fast. Adding to the See Automation, 77
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Measurements must be accurate when dealing with flow control through pumps, valves From 75 and tanks. Timing and recipes fact that PLCs do not play songs must be correct when defining calculations for mixing chemior videos, their graphical user cals. Safety must be paramount interface is usually depenwhen moving men and women dent upon separate software a thousand feet below ground. applications designed as such, leaving the PLC to scan its code Conveyer belts use Variable Frequency Drives to hold a for years on end, never missing steady speed. These VFDs are a beat. Automation is that key com- programmed in PLCs to set frequency, alarm conditions, ponent in ensuring everything and stop/start commands, just happens at the same time, to name a few of the potential speed and level for as long as 100-plus parameters available production is occurring. Doing billions of calculations per sec- to the programming engineer. While traditionally proond, these systems can check, prietary in nature, PLCs from double-check, adjust, correct and continue, in the blink of an competing organizations eye. All of that is vital to organi- such as Emerson, Rockwell zations that require such precise Automation, and Siemens can work together sharing data, control — including mining. communications channels This fact is essential and information. Each can do throughout the mining indusroughly the same using standard try, especially in processing.
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programming languages like Ladder Logic and Function Block Diagram. Fears abound when it comes to automation, especially in relation to the job sector. The fear that robots will eventually replace us all isn’t relegated to just a post-industrial wasteland in “The Matrix.” Automation has been a mainstay in many industries for decades and will continue to do so. As systems require finer measurements and quicker response times to changing environments, we need those automated systems to adapt and change, via physical methods like high-temperature locations or improved speed and reliability of networked infrastructures, to ever-expanding roles that a pick-axe and shovel simply can’t do. After all, automation was never designed to replace workers, just replace relays.
The wiring still exists. The field devices still exist. Competency across the aisle, from electricians, to operators, to engineers, to programmers is tantamount to a successful business regardless of industry. Hundreds of people must be trained to not only program, but maintain, troubleshoot, design and develop the systems needed. Remember, it’s automation that keeps those Oreos looking, tasting and smelling the same. So, go ahead, have one, because there are millions more, all the same, where that came from.
Jim Adams served in the U.S. Navy as a cryptologist and traveled to more than 30 countries. A job teaching automation led to employment with a major mining company that operates in Northeastern Nevada, where he now works as an automation engineer.
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78 • MINING QUARTERLY • SUMMER 2018
Mining companies report Q1 results operations for future debt repayments. Proceeds from any future portfolio optimization will be used to enhance the project pipeline, or returned to shareholders. • Nevada growth projects remain on schedule TORONTO — Despite lower production levels, Barrick Gold Corp.’s first-quarter and within budget. The Fourmile exploration program in the Cortez district is progressing, adjusted net earnings, operating cash flow with encouraging initial assay results.
Select abridged results
Barrick Gold
and free cash flow all increased compared to the prior-year period, primarily driven by higher gold prices. • The company announced April 23 that gold production and costs for the quarter ending March 31 were in line with expectations, with higher production and lower costs expected in the second half of 2018 driven by the timing of capital expenditures, higher throughput and improved grades. • The company’s priorities for 2018 are focused on positioning Barrick to grow free cash flow per share over the long term from a portfolio of high-quality, long-life gold assets in the Americas, with an increasing focus on organic growth in Nevada and the Dominican Republic. • At existing operations, the company stated its goal is to maintain industry-leading margins through a continuous cycle of optimization, pushing mines to achieve greater levels of safety, efficiency and productivity, while working to mitigate increasing costs associated with more complex ore types and a shift to more underground mining. • In addition, Barrick is making investments in digital technology and innovation to identify and accelerate further operational improvements across its portfolio. • Barrick reported first quarter net earnings attributable to equity holders of $158 million ($0.14 per share) and adjusted net earnings of $170 million ($0.15 per share). • The company reported first quarter revenues of $1.79 billion, net cash provided by operating activities of $507 million, and free cash flow of $181 million. • Gold production in the first quarter was 1.05 million ounces, at a cost of sales applicable to gold of $878 per ounce, all-in sustaining costs of $804 per ounce and cash costs of $573 per ounce. • Copper production was 85 million pounds, at a cost of sales applicable to copper of $2.07 per pound, all-in sustaining costs of $2.61 per pound, and C1 cash costs of $1.88 per pound. • The company expects full-year gold production of 4.5-5.0 million ounces, at a cost of sales of $810-$850 per ounce, all-in sustaining costs of $765-$815 per ounce, and cash costs of $540$575 per ounce. • Full-year copper production guidance remains at 385-450 million pounds, at a cost of sales of $1.80-$2.10 per pound, all-in sustaining costs of $2.30-$2.60 per pound, and C1 cash costs of $1.55-$1.75 per pound. • During the first quarter, S&P Global Ratings and Moody’s Investors Service upgraded Barrick’s credit rating, citing significant improvements in free cash flow generation and liquidity, supported by the company’s low-cost portfolio and favorable geopolitical risk profile. • The company does not intend to sell additional assets for purposes of debt reduction, and will use cash on hand and cash flow from
Coeur Mining
CHICAGO — Coeur Mining Inc. reported first quarter 2018 financial results April 25 as well as an overview of key operating and strategic achievements during the period.
• Financial results for the first quarter included revenue of $163.3 million and net income of $0.7 million. First quarter cash flow from operating activities was $15.5 million, adjusted EBITDA was $49.5 million, and free cash flow was a loss of $26.8 million. • The results reflect strong production and cost performance at the company’s Palmarejo silver-gold mine in northern Mexico, including a second consecutive quarter of costs applicable to sales per average spot silver equivalent ounce below $7. • Performance was also impacted by a normalization of production levels at the Rochester mine in Nevada, which benefited from a temporary boost to production during the prior quarter due to accelerated recoveries from the newly expanded Stage IV leach pad and from the placement of higher-grade gold ore during the second half of 2017; planned lower grades during the quarter at the Wharf and Kensington mines; and a $17.9 million increase in working capital compared to year-end 2017. • Free cash flow during the quarter was additionally affected by capital expenditures of $18.6 million related to the commissioning of operations at the company’s new Silvertip underground mine in British Columbia. • Coeur achieved several important milestones during the first quarter, which included commencing production slightly ahead of schedule at the Silvertip mine and announcing the results of a re-scoped mine plan and preliminary economic assessment for its Rochester mine in Nevada. The PEA reflects plans to add high-pressure grinding roll technology to Rochester’s crushing circuit, potentially improving silver recovery curves and doubling the mine’s expected net asset value to $609 million. The introduction of HPGR technology has the potential to increase Rochester’s silver recoveries from 61 percent over 20 years to 70 percent in just over two years, which could significantly improve the mine’s economics. The PEA also specifies that the technology would reduce cost per gold equivalent ounce for the first 10 years after installation, increase life-of-mine cash flows and improved margins by 122 percent and extend mine life to 2038.
company reported selected unaudited financial results for the fiscal quarter.
• Select financial results show that the company experienced a net loss of $2.5 million or ($0.05) loss per share for the first quarter of 2018, as compared to net loss of $2.8 million, or ($0.07) loss per share for the same period last year. The improvement resulted from net cost reduction efforts. • Comstock’s real estate, exploration, mine development, environmental and reclamation expenses achieved record lows, while general and administrative expenses stayed relatively flat. • The company’s net cash used in operations during the first quarter totaled $1.1 million, with another $1 million net cash in financing. Comstock’s total cash and cash equivalents in the first quarter equaled $2 million. • In operations, Comstock advanced an option agreement with Tonogold, announced in October 2017, regarding the Lucerne Mine. Tonogold invested approximately $1 million for the evaluation and assessment of the Lucerne Mine Project’s resource and preliminary economic feasibilities.
Kinross Gold
TORONTO — Kinross Gold Corp. reported a strong operational start to 2018, with solid production from mines and lower costs, the company announced in first-quarter results May 8.
• Kinross produced 653,937 attributable gold equivalent ounces in the first quarter of 2018, compared with 671,956 gold equivalent ounces in the first quarter of 2017. • Revenue from metal sales increased 13 percent to $897.2 million in the first quarter of 2018, compared with $796.1 million during the same period in 2017, due to an increase in gold equivalent ounces sold and a higher realized gold price. • Adjusted operating cash flow increased by 45 percent to $363.7 million for the first quarter of 2018. Net operating cash flow was $293.5 million. • Adjusted net earnings increased to $125.2 million, or $0.10 per share, for Q1 2018, compared with adjusted net earnings of $23.4 million, or $0.02 per share, for Q1 2017. The increase was mainly due to higher margins and a decrease in depreciation, depletion and amortization. • Reported net earnings were $106.1 million, or $0.09 per share, for Q1 2018, compared with earnings of $134.6 million, or $0.11 per share, in Q1 2017. • Capital expenditures increased to $246.9 million for Q1 2018, compared with $178.9 million for the same period last year. • Construction of the Round Mountain Phase W project is progressing according to schedule, with engineering 90 percent complete and initial low-grade ore expected in mid-2019. Pre-grading of the heap leach pad has commenced, along VIRGINA CITY — The advancement of with earthworks in the new infrastructure area. commissioning of two new electric rope a joint venture on the Virginia City his- The shovels has been completed and stripping is toric Lucerne Mine and the reduction of progressing on schedule. debt highlighted the first-quarter results • At the Bald Mountain Vantage Complex, announced by Comstock Mining Inc. The engineering is now 90 percent complete with
Comstock Mining
ELKO DAILY FREE PRESS, Elko, Nevada • 79 commissioning of the heap leach pad and processing facilities expected to commence in Q1 2019. The majority of procurement packages and construction contracts have been awarded and all major permits have now been received.
Klondex Mines
VANCOUVER — Klondex Mines Ltd. sustained a net loss of $8 million in the first quarter of 2018, according to the company’s operational and financial results released on May 3.
company had total liquidity of $43.8 million, consisting of $38.8 million in working capital and $5 million revolver borrowing availability. The company held metal inventory valued at approximately $28.8 million at the end of the first quarter.
McEwen Mining
TORONTO — McEwen Mining Inc. reported an industrious start to the year, especially in gold production, development and exploration, in its first • Net loss for the first quarter of quarter 2018 results released 2018 was $8 million or $0.04 per May 1. share. The first quarter of 2018
included $3.6 million for costs related to the pending acquisition of Klondex by Hecla Mining Co. Excluding the net impact of these costs, the company’s adjusted net loss for the quarter was $5.1 million or $0.02 per share. • The company announced in March that Hecla will acquire all of the outstanding shares of Klondex through a plan of arrangement. Hecla will acquire Klondex for consideration of $462 million comprised of cash and shares of Hecla common stock. • The closing of the transaction is subject to certain conditions including shareholder and regulatory approvals. Pending receipt of all required approvals, the company anticipates that the transaction will be completed around the end of the second quarter of 2018. • Klondex mined a total of 49,873 gold equivalent ounces, with production of 43,525 GEOs. In Nevada, total GOEs mined were 47,499, with production of 41,415 GEOs. At the True North mine in Canada, the company mined and produced 2,374 and 2,111 GEOs respectively from underground operations. Klondex sold 42,541 GEOs, consisting of 40,572 gold ounces and 158,239 silver ounces. • Revenue was $56.8 million from average realized selling prices per gold and silver ounce of $1,334 and $16.61, respectively. • First quarter 2018 revenues increased compared to the first quarter of 2017 due to more ounces sold and a higher price per ounce of gold. Increases in production costs during the first quarter of 2018, as compared to the same period in 2017, were driven by the operations at Hollister and Aurora, which were not operating during first quarter 2017. • Cash balance at the end of the first quarter of 2018 was $27.8 million after $8 million of operating cash inflows, $3.3 million used in investing activities, and $0.5 million used in financing activities. As of March 31, the
• The first quarter of 2018 “marked the beginning of an important year for McEwen Mining,” said Robert McEwen, executive chairman and chief owner, in an investor conference call. • The company achieved production of 44,344 gold equivalent ounces in the first quarter of 2018. • Net cash flow from the business, excluding project development costs, was $12.4 million, offset by $22.7 million related to investments toward long-term production growth at Gold Bar in Nevada, Black Fox project in Canada and Los Azules project in Argentina. • Consolidated net loss was $5.2 million, or $0.02 per share. In the first quarter, McEwen paid a semi-annual return of capital distribution of $0.005 per share of common stock, for a total distribution of $1.7 million. • As of April 30, the company had cash, investments and precious metals of $47 million — and no debt. • During Q1 2018, construction activities at Gold Bar focused on finishing civil works related to the heap leach pad, ponds and site infrastructure, in preparation for major equipment and material deliveries in the second quarter. • Cumulative to date, McEwen capitalized $14.8 million to construction in progress relating to permitting, engineering, and site development activities. The company expects to spend about $25 million per quarter in the second and third quarters. McEwen said the company might consider taking on some debt to finance Gold Bar. • Construction is advancing on schedule for completion by the end of 2018, and McEwen expects to declare commercial production in early 2019. During the first three years of operation, Gold Bar is projected to produce approximately 55,000, 74,000 and 68,000 ounces of gold respectively.
See Report, 80
80 • MINING QUARTERLY • SUMMER 2018
Report From 79
Newmont Mining
DENVER — Newmont Mining Corp. declared a dividend of 14 cents per share and a strong portfolio in first quarter 2018 results released April 26. “Newmont delivered solid operating and financial results in the first quarter,” said Gary J. Goldberg, president and CEO in a statement. “Costs and production remained in line with guidance, and our next generation of profitable mines … advanced on schedule to the next stage of development study. We also generated $644 million in adjusted [earnings before interest, taxes, depreciation and amortization] and declared a dividend of $0.14 per share, nearly three times higher than prior year quarter.”
• The company generated $644 million in EBITDA, representing a 12 percent increase compared to the same quarter in the previous year. The per share dividend is the strongest among senior gold producers, Newmont stated. Free cash flow totaled $35 million, and cash on hand amounted to $3.1 billion. • Net income from continuing operations attributable to stockholders was $170 million, or $0.32 per diluted share, delivered adjusted net income of $185 million or $0.35 per diluted share, up 35 percent compared to the prior year quarter.
• The company — with about 70 percent of its projects in the U.S. and Australia — strengthened its portfolio in the first quarter, Goldberg explained in an investor conference call. • In North America, Newmont is on track to bring Northwest Exodus and Twin Creeks into commercial production this year, and has ushered Long Canyon Phase 2 into the next stage of a development study while underground development is ongoing. In the first quarter, Newmont began shipping concentrates from the Cripple Creek & Victor mine in Colorado for processing in Nevada, and the process is yielding higher-than-expected recoveries. • Revenue for Newmont increased by about 8 percent over the first quarter, to $1.8 billion, realized by higher gold prices, said Newmont Executive Vice President and Chief Financial Officer Nancy Buese on the conference call, despite lower production. • Newmont produced 1.21 million ounces of gold in the first quarter, a decrease of 2 percent from the previous quarter. Lower production was because of lower leach activity, lower grade, maintenance and reduced recovery at CC&V while the company prepared concentrate for shipment to Nevada. • Adjusted net income was $185 million or $0.35 per diluted share, compared to $136 million or $0.26 per diluted share in the prior year quarter; favorable pricing was partially offset by lower production and higher CAS. The adjustments to net income of $0.03 related to restructuring, valuation allowances and other tax adjustments. • The company also continued to invest in projects and exploration “to improve mine life and build a stronger reserve base,” Buese said, adding
that another focus is to return cash to shareholders. Newmont is on track to return $350 million to shareholders in 2018, she said. • Goldberg wrapped up the conference call by saying Newmont’s stable assets and pipeline of projects give the company an advantage in the industry. Going forward, the company aims for steady and profitable production over a longer horizon, investment in exploration, and to create value for investors.
Premier Gold Mines
THUNDER BAY — Explorer-turned-producer Premier Gold Mines Ltd. reported growth efforts — with a strong focus on Nevada — in the first quarter of 2018 in its operating and financial results released May 8.
• The company became a producer in late 2016 and has a pipeline of precious metal projects in mining jurisdictions in Canada, Mexico and the United States. • Premier leaders expect to have three advanced exploration or mine projects under development by the end of the year. • At the South Arturo property near Carlin, Premier plans to commence construction of the Phase 1 open pit and El Nino underground from the bottom of the Phase 2 pit in the second half of 2018. The company partners with Barrick Gold Corp. to process South Arturo’s stockpiled ore at the Barrick Nevada Goldstrike mine, and in Q1, 15,541 ounces of gold delivered to Premier exceeded guidance for the year. • Overall, Premier’s Q1 production was down compared to the same period last year. From
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ELKO DAILY FREE PRESS, Elko, Nevada • 81 South Arturo and the Mercedes mine in Mexico, the company produced a total of 30,550 ounces of gold and 59,826 ounces of silver during Q1 2018 compared to 50,979 ounces of gold and 98,382 ounces of silver during Q1 2017. • The decrease was due to the completion of mining the Phase 2 pit at South Arturo in 2017 and Mercedes’ production profile being more heavily weighted for the second quarter, said Stephen McGibbon with Premier Gold on the conference call. • At McCoy-Cove south of Battle Mountain, Premier maintains a 100 percent interest in the Cove Property and plans to invest heavily in exploration and development. • In January, Premier signed an agreement that provides Barrick with an option to earn up to a 60 percent interest in the McCoy-Cove Property that surrounds the main deposit area. Exploration on the joint venture property began in April and will include detailed geophysics, surface mapping and soil sampling prior to drill testing several prospective targets. • A preliminary economic assessment is expected to be released in mid-May, in conjunction with the company’s Investor Day on May 15. Preliminary engineering, and dewatering and baseline studies have been initiated to advance an underground exploration program planned in the second half of 2018. • Premier reported revenue of $39.2 million, operating income of $9.6 million and a net loss of $2 million, or 1 cent per share. Total capital spending was $5.3 million. The company has a cash balance of $98.4 million.
SSR Mining
VANCOUVER — Production is primed to
ramp up at the Marigold Mine near Valmy, SSR Mining Inc. reported in its financial and operation results released May 10. “We produced over 78,000 gold equivalent ounces with all three operations performing well during the quarter,” said Paul Benson, SSR Mining president and CEO, adding that the company’s operating and financial performance “positions us well for growth in 2018 and 2019.”
• At Marigold, the company produced 42,960 ounces of gold at cash costs of $720 per payable ounce of gold sold, and stacked a near-record 7.1 million tons of ore. • Production was within guidance but down 19 percent from the previous quarter because of lower ore stacked in the fourth quarter; however, Marigold mined 16.2 million tons of material, 16 percent more than the previous quarter, reflecting an increase in operating days for the quarter due to a resumption of normal mining activities, SSR Mining stated in a press release. • The company’s 17 percent overall revenue decrease for the quarter was because of anticipated declines in sales from its Argentina operation while processing lower grade stockpiles, and due to planned production and leach cycles at Marigold. • Despite lower cash generated from operating activities in the first quarter, SSR Mining added to its cash balance sheet with the sale of common shares of Pretium Resources Inc. and funds from a joint venture. Cash and cash equivalents increased to $472.9 million during the quarter, creating a “rock solid” balance sheet, Benson said on a conference call covering first-quarter results. • Quarterly material movement is expected to
increase this year as four additional haul trucks join the Marigold fleet. Approximately 7.1 million tons of ore, a near record, were delivered to the heap leach pads, according to results. • Cash costs at Marigold were 3 percent higher than the previous quarter at $720 per payable ounce of gold sold in the first quarter. The increase is attributed to the cost per ounce of leach pad inventory going up, continued lower gold grades and a reduction in deferred stripping, SSR Mining reported. • Total mining costs of $1.80 per ton in the first quarter of 2018 were 9 percent lower than in the previous quarter due to more tons mined. Processing and general administrative costs were 14 percent and 18 percent lower. • A total of 42,078 ounces of gold were sold at an average realized price of $1,331 per ounce during the first quarter of 2018, a decrease of 18 percent from the 51,420 ounces of gold sold at average realized price of $1,269 per ounce during the fourth quarter of 2017, the company reported. • Also at Marigold, SSR Mining is focusing 2018 exploration on infill drilling of the Red Dot resource area and exploring the Mackay Phase 5 pit, where the first series of drill holes targeted higher grade structures. • A technical report to be filed by the third quarter will include the 2017 mineral reserves contained in the life-of-mine pit design and reflect added hauling capacity for expected annual gold production of more than 250,000 ounces in 2022.
Visit miningquarterly.com for expanded versions of the companies’ first-quarter results.
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82 • MINING QUARTERLY • SUMMER 2018
COLUMN
Eying critical minerals
O
ne of the hot topics over the past several months for the mining industry has been a resurgence of discussions on “Strategic and Critical” minerals. On December 20, 2017, just two days before he signed the “Tax Cuts and Jobs Act,” President Donald Trump DANNY issued Executive TAYLOR Order No. 13817, “A Federal Strategy to Ensure Secure and Reliable Supplies of Critical Minerals.” Now this is nothing new. In the early 1980s, then-Senate Majority Leader Paul Laxalt secured funding for a new 60,000-square-foot building for the Mackay School of Mines (the Laxalt Mineral Research Building) designated to house a Center for the Study of Strategic and Critical Minerals. This was during the Cold War era, and folks in Washington were very concerned about the U.S. not having access to minerals essential to national defense (Strategic) due to disruptions in import supply lines (Critical). The initial report from the Center identified four mineral groups that met the criteria of Strategic and Critical: platinum group metals, chrome ores, manganese and rare earth elements. All four were necessary for defense industries, and none was being produced in the U.S. In fact, the principal production for these minerals was either southern Africa or
More on critical minerals Read more about the draft list of critical minerals on Page 36 of the summer 2018 issue of Mining Quarterly. Find out how one critical mineral, magnesium, is mined in the state by reading the Mining Quarterly feature story on Page 24.
the Soviet Union. Concern over supply security for minerals dates to the early 1950s when the ramifications of the impacts of the Cold War on global economic activity were being realized, and the impact of U.S. reliance on foreign sources of supply in the post-World War II era became part of our national security policy. By 1954, net import reliance (defined as the amount of imported material, including changes in stocks, minus exports and expressed as a percentage of domestic consumption) was recognized as an important factor in global economic success. The U.S. Bureau of Mines was tasked with tracking production and consumption of minerals both domestic and foreign, and ascertaining the percent net import reliance for all the commodities used in our economy. After the demise of the Bureau of Mines during the Clinton administration, the responsibility was transferred to the U.S. Geological Survey. Since 1954, several additional studies have been
[I]t is not only appropriate, but also actually essential, that we reexamine the status of critical and strategic minerals on a regular basis. authorized by either the executive or the legislative branches. Usually, about every time the administration changes, someone notices our reliance on foreign mineral sources, goes into panic mode and demands that “Something must be done!” So, here we go again. Now, it is not as if we are reinventing the wheel every time another study is done, as one of the most important principles in mineral economics is that technology changes the parameters of mining. Over the past seven decades, changes in exploration, mining methods and processing have changed what we think of as ore deposits (supply), and changes in the technologies of transportation, electronics and manufacturing have totally redefined the set of minerals required by our economy (demand). Finally, the changing geopolitical landscape has redefined our notions of what are risky supply lines. Therefore, it is not only appropriate, but also actually essential, that we reexamine the status of critical and strategic minerals on a regular basis. In its current form, as contained in Executive Order No. 13817, Critical Minerals are defined as: “(1) identified to be a nonfuel mineral or mineral material essential to the economic and national security of the
United States, (2) from a supply chain that is vulnerable to disruption, and (3) that serves an essential function in the manufacturing of a product, the absence of which would have substantial consequences for the U.S. economy or national security.” This is a great starting point for the study. Note that the percent net import reliance is accounted for in item (2), vulnerability of supply chain to disruption. For example, while copper is certainly an essential material, it is not considered critical because the U.S. produces 67 percent of what we consume (percent net import reliance is 33 percent) and of the remaining third of our consumption, 94 percent comes from Western Hemisphere countries (Chile, Canada and Mexico). Even for minerals with a high percent net import reliance, we may not consider them critical based on security of the supply chain. For example, potash, which provides potassium fertilizer essential for our nation’s agriculture, has a percent net import reliance of 90 percent. However, Canada holds almost 25 percent of the total world reserves, and so from a supply chain perspective, it also misses the critical designation as it is covered under the North American Free Trade Agreement. Nonetheless, the USGS
ELKO DAILY FREE PRESS, Elko, Nevada • 83
has produced a draft list of Critical Minerals as required by the executive order that includes 35 minerals ranging from aluminum to zirconium. Of these, China is the world’s top producer of 19 and the top U.S. supplier of 13. The problem with these materials is that in almost every case, the U.S. has scant minable deposits of these materials, or if we have resources, they have not been developed and would take considerable investment to bring on-line. So, the problem of critical minerals needed for our economy and national defense is indeed worth studying to inform a rational minerals policy for our country. I suggest we all keep an eye on the results of these studies. One last point is that the current status of our supply chains is dependent on the
equilibrium with new assessments of supply chain security. This applies especially to minerals where the high percent net import reliance is due to lack of resources within our borders. Maybe we need to keep both eyes on this situation. Meanwhile, “Keep on Muckin’.”
Mining consultant and professional engineer Dr. Danny Taylor is an industry expert specializing in mine operation economic analysis. He retired from the University STEVE MARCUS /LAS VEGAS SUN VIA AP The price of lithium increased 61 percent in 2017 compared to the previous of Nevada, Reno, in 2017 after 37 years of teaching year. Technical-grade lithium carbonate comes off a conveyor belt during and leadership. The UNR a tour of the Silver Peak lithium mine near Tonopah in this Jan. 30, 2017 chairman emeritus holds a photo. bachelor’s degree in mining and mineral engineering, were to disrupt those agreestatus of world trade. That master’s degree in operaments, such as perhaps a trade tions research and doctorate status is based on internawar triggered by unilateral tional trade agreements such in mineral economics. His tariff increases, the entire sys- business is Pairadocs Conas NAFTA and the Trans-Pacific Partnership. If something tem would need to find a new sulting Inc.
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84 • MINING QUARTERLY • SUMMER 2018
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ELKO DAILY FREE PRESS, Elko, Nevada • 85
COLUMN
Threat of land withdrawal
M
ore than 80 percent of Nevada’s landmass is managed by the federal government. This fact of life in Nevada has been a source of conflict over the years as Washington, D.C.-based agencies have struggled to administer the local issues, interests and concerns that come with managing approxiDANA mately 60 milBENNETT lion acres. Fortunately, with the partnership of responsible local leaders and professional state agencies, Nevadans know these resources are in good hands. Nevada mining has long supported the time-honored “multiple use doctrine” that federal agencies use to guide their land management. This doctrine prioritizes public accessibility to these lands and provides that the land should be managed to ensure the appropriate mix of uses that best suit the public. Determining the best mix for any given area always includes multiple opportunities for public comment. Nevada mines are serious about stewardship of the public lands near their operations. Mines work closely with local communities, tribal representatives, and state and federal agencies to develop plans for current operation and future closure that pay careful consideration to protecting Nevada’s land, wildlife, air and water resources. Strict environmental state and federal oversight continues throughout and beyond the life of a mine. This stewardship is at the core
Today, more than 1 in 3 acres of Nevada land have been formally withdrawn from mining activity or are otherwise inaccessible for exploration or development, leaving 65 percent of the Silver State open for mineral consideration.
of multiple use, and multiple use is at the core of federal land management strategy. Unfortunately, erratic planning and efforts to restrict access have put the multiple use doctrine at risk. Today, more than 1 in 3 acres of Nevada land have been formally withdrawn from mining activity or are otherwise inaccessible for exploration or development, leaving 65 percent of the Silver State open for mineral consideration. This figure seems like a lot until you consider the fever pitch with which lands are being constrained: In 2016, nearly 1 million acres of public land were withdrawn from mineral access. This year alone, there are pending proposals to withdraw at least 1.4 million more acres. There is no end in sight. In Washoe County, policymakers are considering a proposal to withdraw up to 440,000 acres from mining access. In exchange, the county proposes to acquire another 60,000 acres in land to be auctioned off and developed. In Clark County, another 400,000 are on the table for withdrawal to develop roughly 35,000 more. The Department of the Navy is seeking to expand Naval Air Station Fallon by 600,000 acres
Navy seeks to triple Fallon range The Navy wants to more than triple the size of its training range near Fallon in west-central Nevada, a move that would cut off public access to the federal land in five counties. The Bureau of L a n d M a n a ge ment is gathering input on the plan to expand the current 224,000-acre range to nearly 770,000 acres by adding federal land in Churchill, Lyon, Mineral, Nye, and Pershing counties. The Navy’s proposal comes as the Air Force seeks to add 302,000 acres to the Nevada Test The Bureau of Land Management land withdrawal evaluation for the U.S. Navy’s proposal and Training Range to triple the size of its Fallon range analyzes that now covers the mining claims that would be affected. more than 2.9 million acres in Clark, Lincoln and Nye counties. The services say they need to enlarge ranges to conduct realistic combat exercises using the latest weapons systems.
– making this land inaccessible for mineral or geothermal development for generations to come. Nevada minerals power 21st-century technology. Each withdrawn acre represents an area where discovery and development of the minerals that power our future may never be found or developed, no matter how great the need. Preserving multiple use, meanwhile, gives the public options to determine the best mix of land uses based on the context of the time and situation. This long-established doctrine should be preserved, and
policymakers should be allowed the flexibility to determine the best uses based on what the state and its communities need. To do otherwise is shortsighted and irresponsible.
Dana Bennett is the president of the Nevada Mining Association, established more than 100 years ago. NvMA now debates policy matters in the state legislature and local governments, unites the voice of the industry in public relations, and leads the industry’s efforts in the community for its 400-plus members.
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ELKO DAILY FREE PRESS, Elko, Nevada • 87
COLUMN
The mountains’ eternal value
I
f there is a single reason to live in northeastern Nevada it is not the western charm of Elko or the lucrative jobs in the mining industry. It is the Ruby Mountains.Few places on Earth have the secluded appeal of this archetypal mountain range lying just 20 minutes from town. With its JEFFRY 10 peaks above MULLINS 11,000 feet, dozens of lofty waterfalls and breathtaking alpine lakes, the Ruby Mountains have been called America’s “Little Yosemite” and “the Swiss Alps of Nevada.” Along with the Jarbidge Mountains to the north, the Rubies offer vast wilderness areas and groomed trails for hiking; streams and lakes for trout fishing; big game hunting and wildlife viewing; and simply a place to cool off and get away from civilization. It’s no surprise that a proposal to lease land in the Ruby Mountains for oil and gas drilling has galvanized resistance from a variety of interests. A collection of conservation and sportsmen groups banded together to run a full-page ad in the Elko Daily Free Press declaring “The Ruby Mountains are Nevada’s Crown Jewel.” I couldn’t agree more. Everyone I know in Elko County and the surrounding area appreciates the Ruby range for its sublime beauty and its value as a destination for outdoor pursuits including helicopter skiing, rock climbing, snowmobiling, cross-country skiing, camping and more. Now we are learning just how widespread
back yard!” Elko County and the rest of Nevada have millions of acres of public land where oil and gas drilling can be done without impact to recreational assets that are so highly valued by so many people. Actually, a few fracking wells have already been drilled nearby in the Ruby Mountain foothills around Jiggs and Lamoille – and they have such a small footprint that no one has noticed. Crude oil prices tanked shortly after they were drilled, so they have not paid off. Oil is on its way back up, however, and operations that were less than marginal a few years ago could soon see more interest. Elko Daily nature columnist Larry Hyslop explained how the It’s a metamorphic ore complex. process might play out: that sentiment is among a host “If the USFS decides some of visitors who have experienced There’s no sedimentary rock or all of these lands should be that would contain oil.” the mountains for themselves It’s a mystery to our newspa- offered, then the BLM would after an individual requested per, too, as we have been unable decide whether to include these 54,000 acres of forest land be lands in their quarterly oil/gas to track down the applicant to put up for lease. leasing sales. The lands may or ask why. The request itself is not out may not be leased during the The recreational values, of line. In fact, it conforms with however, are many. Putting their lease sale. Also, an oil/gas coma 1986 management plan that pany might lease the mineral designates portions of the range money behind this message rights to some of this land but open to leasing. The U.S. Forest are groups invested in Rocky never make a proposal to disturb Mountain bighorn sheep, mule Service is completing an envideer, trout, chukar and the wil- the land.” ronmental assessment and will The Forest Service took the provide guidance to the Bureau derness experience. rare step of extending public I wholeheartedly agree that of Land Management regardcomment on this proposal. the Ruby Mountains are Nevaing leasing. Residents and visitors had until But the request runs counter da’s crown jewel. Am I biased? April 23 to express their views. to public opinion, as thousands Of course. I have lived here for Keeping the Ruby Mountains of protesters have shown. And it more than 35 years and have pristine is important for Elko defies common sense, according grown to love the mountains and northeastern Nevada’s to Nevada Department of Min- more each time I visit them, which is frequently. Our home- future. While resources such as erals Administrator Rich Perry, oil and gas – or even gold – have stead has a pristine view of a former Elko city councilman their limits, the value of the the Rubies and I don’t want to who was appointed by Gov. Ruby Mountains as a recresee dozens of oil rigs any more Brian Sandoval: ational and tourist destination “I have no idea why this indi- than I want to see additional is eternal. cellphone towers rise in front vidual nominated these pieces of them. of ground in the Rubies,” Perry You might even call me a told the Elko Daily. “I know of Jeffry Mullins is editor of the hypocrite, shouting “Not in my Elko Daily Free Press. no targets for oil in the Rubies.
88 • MINING QUARTERLY • SUMMER 2018
COLUMN
Steel tariffs a diversion
T
he news is full of talk about tariffs, trade, trade deficits, Chinese conspiracies and trade wars, and it’s reasonable to ask what impact will all of this have on the mining industry. After all, the industry uses heavy equipment made from steel (one of the subjects of JOHN the much-disDOBRA cussed tariffs) and lots of steel in other uses. In addition, we remember that 10 years ago when the Chinese economy was booming, demand for steel, heavy equipment and accessories, like tires, sent prices soaring and created worldwide shortages that severely affected Nevada miners. To put these issues in perspective, nothing has happened yet except for the publication of numerous articles about how horrible or wonderful — depending on who’s paying — it will be. So far, it’s just noise – a “nothing burger.” President Donald Trump proposed a 25 percent tariff (tax) on steel and a 10 percent tariff on aluminum imported into the U.S. This would presumably increase the profits of U.S. producers and the costs of U.S. consumers. A major stated rationale for the tariffs is the U.S. trade deficit, that is, the value of goods and services imported into the U.S. in excess of the value of U.S. exports, which was $566 billion last year. I say the trade deficit is the stated rationale because, for a number of reasons, the trade
Yet steel tariffs probably aren’t happening, and even if they do, they won’t make much difference.
deficit has very little to do with what is going on. First of all, the current trade deficit is not even large by historical standards; in fact, it’s slightly below the recent average as a percent of gross domestic profit. Moreover, despite the fact that “deficit” sounds “bad,” it really isn’t. The trade deficit is, by definition, equal to our capital “surplus.” When foreigners accept dollars for goods or services, they can either hold the money, i.e., invest in our paper, or buy something from us. Whichever they choose, we’re better off. Of course, there are situations when extreme deficits could be a problem, but this isn’t one of them. A second stated reason for the steel tariff is China’s $375 billion trade deficit (out of the $566 billion total) with the U.S. Now we are getting closer to what’s going on, but it really doesn’t have much to do with steel. Yes, China is the world’s largest steel producer, producing about half of the world’s supply. It has also invested heavily in production capacity to the point where it has over-capacity and is accused of “dumping” its excess steel, i.e., selling below cost, on the world market and depressing world prices but employing Chinese steel workers. This has steel producers around the world crying “foul!” U.S. steel producers would
like higher domestic prices that supposedly would result from the tariff, but there is still a problem with this story. Only about 2 percent of steel used in the U.S. comes from China. If a tariff were imposed, that percentage would fall to zero. The biggest exporter to the U.S. is Canada (14 percent) and besides the fact that there is no good reason to aggravate our friends the Canadians, imposing a tariff would violate the North American Free Trade Agreement, set off legal disputes, etc., and just doesn’t make sense. We’ve already said we will exempt Canadian steel. So, you ask, what’s the point? It’s kind of like Muhammed Ali waving around his right hand before he punches you with his left – it’s a diversion. The real point is to get China’s attention and get them to the table to discuss trade practices, which range from unfair to illegal. Tariffs on U.S. cars exported to China are 25 percent, while tariffs on Chinese cars imported to the U.S. are 2.5 percent, for example. China prohibits U.S. companies operating in China without a majority Chinese partner. In many cases, the result is that the Chinese partner co-opts the U.S. partner’s trade practices and secrets then competes against them. The biggest insult of them all, the Chinese are accused of stealing $600 billion in U.S. intellectual property, such as patents and technology, annually, by various means including cyberwarfare, which dwarfs the trade deficit. For their part, the Chinese
have threatened retaliation with a tariff on U.S. soybeans. OK, if the Chinese don’t buy soybeans from the U.S., where will they get them? They are not going without soy sauce. Brazil and Argentina are the next largest-producers, so the Chinese will probably go there, driving up prices to Brazil and Argentina’s current customers. Where will these customers go? Probably to U.S. suppliers. The net effect is market disruption and possibly higher transportation costs for foreign soybean buyers. For these and other reasons, economists generally oppose tariffs and want to avoid trade wars. However, there is fairly wide and growing agreement that we are already in a trade war and have been for a long time. The U.S. is not alone in opposition to Chinese trade practices, so look forward to more trade talks, threats and posturing. Yet steel tariffs probably aren’t happening, and even if they do, they won’t make much difference. It’s been said that trade talks are a bit like breeding elephants – there is a lot of grunting and roaring, it all takes place at a high level, and it takes years to find out what happened.
John L. Dobra is an associate professor of economics at the University of Nevada, Reno’s College of Business and has almost 30 years experience consulting for mining companies. Dobra is a senior fellow at the Fraser Institute, has been published in academic journals and has testified in Congress on mining issues.
ELKO DAILY FREE PRESS, Elko, Nevada • 89
COLUMN
Continuous improvement
F
or this issue of Mining Quarterly, I wanted to share with you a white paper written by a colleague who makes the case that we should take better advantage of technology in our journey toward “true zero” injuries. In a world where we can track every movement of a THOMAS E. “TED” haul truck and BOYCE know exactly where we stand on production at any given moment, why not apply the same level of detail to prevent injuries? The technology suggested by Keven Pritchett is use of a voice assistant like Alexa in the field. Imagine a world where you can easily call up a Safety Data Sheet with a simple voice command. Would it not help prevent injuries if you can be periodically prompted to alter your movement during the performance of a repetitive task? Would it not be a gamechanger if you could regularly receive feedback about safe and at-risk behaviors when you are working alone or when those working with you are too shy to speak up? Please visit Linked In (and log in) here https://goo.gl/ P3PAat to read Kevin’s article and see if you agree with his suggestions. Then, share this Mining Quarterly article with others to keep the conversation going. Finally, decide if the use of such technologies could enhance safety at your mine site. If you choose to adopt any technology to prevent injures, please don’t forget: Technology advancements
are meant to support, not replace a solid safety program that includes behavioral observation and feedback. You should not assume that people, even the younger generation, will automatically take to the technology. Invest in training for those technologies as much as you would for other technical skills. Production schedules or (perceptions of production), not bad attitudes, are the biggest obstacle to successfully training personnel to expert levels of skill on new technologies. The average person only uses 20 percent of their technology’s capacity (how much of your smartphone’s capacity do you regularly use?). Thus, we suggest you start with the most basic functions then add functionality only when the initial skills have been mastered. Support technology adoption with expert training from the technology developers or your in-house MIS team. Better yet, form a steering team of front-line employees to work in conjunction with MIS to develop the most user-friendly interface for your technology. This will make it more likely to be adopted and properly used. As always, we welcome your comments.
Dr. Thomas E. “Ted” Boyce is president and senior consultant with the Center for Behavioral Safety LLC. Learn more at www.cbsafety. com or contact him at ted. boyce@cbsafety.com. He thanks Adria Pulizzano and Kevin Pritchett for their contributions to this article. You can read Pulizzano’s related case study here: https:// goo.gl/hyxn7t. Call Boyce at 775-232-3099 or find him on social media.
Workplace inspections ARLINGTON, Va. – The M ine Safety and Health Administration published its Final Rule on Examinations of Working Places in Metal and Nonmetal Mines in the Federal Register on April 9. The final rule takes effect on June 2 and requires that: Each working place be examined at least once each shift for conditions that may adversely affect safety or health of miners before work begins or as miners begin work in that place; Mine operators promptly notify miners in affected areas of any conditions that may adversely affect their safety or health and promptly initiate
appropriate corrective action. Notification is only necessary when adverse conditions are not promptly corrected before miners are exposed. A record of the examination be made before the end of each shift, including the name of the person conducting the examination; the date of the examination; location of all areas examined; a description of each condition found that may adversely affect the safety or health of miners that is not promptly corrected, and the date of the corrective action (when that occurs); and The record be made available to MSHA and miners’ representatives upon request.
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90 • MINING QUARTERLY • SUMMER 2018
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COMPRESSOR PUMP & SERVICE, INC.............74
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ELKO DAILY FREE PRESS, Elko, Nevada • 91
IDS NORTH AMERICA .................................. 50
RAM ENTERPRISE INC ................................ 22
J.S. REDPATH CORP ..................................... 47
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S&G ELECTRIC MOTOR REPAIR .................. 45
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SACRISON ENGINEERING ........................... 57
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SAS GLObAL MINING CORP. ........................ 46
NA DEGERSTROM ....................................... 38
SHILO INN & SUITES.................................... 29
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NORTHERN NEVADA EQUIPMENT.............. 35
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NV AERIAL & GROUND PRODUCTIONS....... 12
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OPEN LOOP ENERGY .................................. 56
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ORMAZA CONSTRUCTION ..... FRONT PAGE bANNER & 62
SWCA ENVIROMENTAL CONSULTING......... 20
PILOT THOMAS............................................ 75
THYSSEN MINING INC................................. 36
PLUMbLINE................................................. 55
TONATEC EXPLORATION............................ 30
POLELINE CONTRACTORS .......................... 70
VOGUE SERVICES ........................................ 83
PRAY & COMPANY ....................................... 51
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ZGA ARCHITECTS & PLANNERS .................. 81
92 • MINING QUARTERLY • SUMMER 2018
This colorful hard hat ups the ante on personal protective equipment. Paul Wilmot shared the photo of this custom hat worn by a mill foreman at a Barrick Gold Corp. autoclave plant.
FEATURE
HARD HATS Photo contest winners
SUZANNE FEATHERSTON Mining Quarterly editor
Their primary function is for safety, but hard hats also can be lucky,
fashionable, collected or reused. For the summer Fall 2018 Photo Contest 2018 photo contest, MinTheme: Mining-related collections ing Quarterly readers — Submission deadline: Aug. 9 off the top of their heads Send entries to mining@elkodaily.com — showed how hard hats work in their lives. Thank you to all who participated, and congratulations to the winners!
Kevin Chase, 2, likes to wear his father’s hard hat so he can be safe like his daddy, Anthony Chase, who works at Kinross Bald Mountain. Mother Jacqulyn Chase submitted the photo.
ELKO DAILY FREE PRESS, Elko, Nevada • 93
Meggan Allen might be nicknamed “Shorty,” but she’s not short on creativity, as this photo shows.
Molly Hodges decorates her hard hat with orange and red flowers and a Barrick Nevada process department sticker. Rodney Harney keeps safety top of mind with stickers reminding him and others to perform their field level risk assessments, protect their hands and watch for lightning. He works for Barrick Gold Corp.
94 • MINING QUARTERLY • SUMMER 2018
HISTORY
SUBMITTED
The Liebherr T 248B haul truck used at Barrick Gold Corp.’s Cortez operations dwarfs people and has the ability to haul 400 tons of material.
Haul trucks: Then and now SUZANNE FEATHERSTON Mining Quarterly editor
About 65 years ago, Jim Polkinghorne got a job as a haul truck driver for a tungsten mine near Imlay. Back then, his haul truck held 6 yards of material and was filled using a three-quarteryard shovel. Driving it meant double-clutching and maneuvering without power steering or power brakes. Today, he said his grandson Andy Polkinghorne drives a Liebherr T 248B haul truck at Barrick Gold Corp.’s Cortez operations. The house-size truck, the largest in the Barrick Nevada fleet, has a gross payload of 400 tons and weighs 261 tons when empty, according to manufacturer specifications. “Our hearts swelled with pride at my grandson,” Jim Polkinghorne said as wife
SUMBITTED
In the 1950s, a haul truck at a tungsten mine outside of Imlay could move 6 yards of material. The shovel moved three-quarters of a yard.
Marge nodded. Haul truck driving has progressed in spades since the proud grandfather had the job in about 1954. Not only does the new Liebherr truck have power steering and brakes, but it also can be equipped with software tools for increased efficiency.
Other features include traction control, automatic torque adjustments and the option for operator-assist functions such as warnings when objects get too close and driver-fatigue monitoring, to name just a few advancements. Design also provides maximum visibility,
safe access and ergonomics — something the elder Polkinghorne probably only dreamed of while operating his mid-century haul truck. Jim Polkinghorne drove the haul truck as an independent contractor for a few years, but his career changed to include serving as Elko County manager and Elko mayor, being a teacher and running a ranch before retiring. Taking a turn back to his haul-truck days, he came out of retirement to work as a truck driver for a courier service doing deliveries, namely for the mining industry. The husband-andwife team traveled all over the U.S. and Canada, wearing out two passenger trucks. “It was an adventure for us,” Marge Polkinghorne said. Today, their personal vehicle, a Nissan pickup, has more than 300,000 miles on it.
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